Frank released a summary of draft text (which will be on the committee Web site later today) but said he’d be gathering feedback over the next few weeks and is open to changing the legislation before formally introducing it.
As is, the bill would allow the Federal Housing Administration to provide up to $300 billion in guarantees to help refinance struggling homeowners into mortgages they can afford. The original lender would get a short payment from the new FHA loan’s proceeds in return for taking a hit on the principle. Frank’s office estimates that could help as many as 2 million homeowners avoid foreclosure.
The program would sunset in two years.
The bill also would provide $10 billion in loans and grants so that states can buy up some of the foreclosed properties that are just sitting vacant.
Frank has long favored such a proposal, but the administration doesn’t seem so keen on it.
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