Washington, D.C. -— U.S. Rep. Bob Etheridge voted Tuesday for legislation that would help make safe and affordable mortgages available to more Americans, providing an alternative to risky subprime loans.
The House of Representatives passed H.R. 1852, the Expanding American Homeownership Act of 2007, by a vote of 348 to 72.
“Homeownership is the cornerstone of the American dream and this legislation will help more Americans to achieve that goal,” said Etheridge. “This common-sense reform will allow more Americans to qualify for affordable loans and will prevent more damage from occurring within the housing market that could hurt the national economy.”
Mortgage payments will increase for approximately two million Americans over the next two years and the number of homeowners receiving foreclosure notices hit a record high in the spring for the third quarter in a row. Because of current restrictions on the Federal Housing Administration, more borrowers have turned to the subprime mortgage market for loans.
H.R. 1852 revitalizes the Federal Housing Administration, which was established to provide a reliable source of affordable mortgage loans for first-time homebuyers. The bill will enable the FHA to serve more families seeking to buy a home, including those currently borrowing from subprime lenders. Under the legislation, 40 percent of families with subprime loans could qualify for more affordable fixed rate loans so that they can keep their homes.
The legislation authorizes zero and lower down payment loans to help borrowers who can afford mortgage payments, but not the down payments. It also strengthens protection for higher risk FHA borrowers by requiring counseling and more disclosure about the costs associated with lower down payment loans, so borrowers can make more informed decisions.