When the Senate reconvenes in September one of the first things on Hillary Clinton’s agenda will be to introduce her eight point plan to help the real estate market by putting measures in place to stop mortgage abuses, help families that are facing foreclosure and make for affordable housing available.
The main points of her program are:
* Making it a requirement that mortgage broker disclose the fact that they make higher fees if the mortgages they arrange have higher interest rates. It is not in their best interest to get you the lowest rate.
* Requiring that mortgage brokers be registered with the Federal Government and that the states and the federal government work together to develop stricter and stronger licensing regulations aimed to stop brokers from steering people to high cost mortgages that they cannot afford, thereby leading to more foreclosures. The national registry will enable the public to look up a broker’s history to see if there have been any violations or complaints.
She would also eliminate the prepayment penalties that prevent a borrower, especially one who has a variable rate or other unconventional mortgage, from paying it off when the rates are low. These types of mortgages that lock people in and have large balloon payments tagged onto the end, are responsible for more than half of the foreclosures nation wide.
Make it a requirement that all the costs including taxes, be included in the estimate of monthly costs that the mortgage broker gives to the borrower.
The Senator will also seek the establishment of a $1 billion fund to help the states help borrowers who are in danger of foreclosure. There are different types of programs that the states have available. Some have programs that will help the homeowner make a single payment to bring them up to date and some have programs that will help re negotiate the loans and some provide financial counseling.
The next proposal in the plan is to expand both Fannie Mae’s and Freddie Mac’s Foreclosure Prevention Efforts to aid more at risk homeowners. It is not a change of policy, it is an expansion of what they already do such as helping homeowners to switch to a less risky, low-cost loan.
.Senator Clinton also wants to establish a different $1 billion fund in order to provide support from the federal government to trust funds established by state, county and city governments. Home prices have risen dramatically over the past few years and unfortunately and salaries have not matched it, meaning it is taking more and more of a family’s income just to meet mortgage payment. In just three years, from 2001 to 2004 the number of homeowners who pay more than half of their income on housing has increased by an estimated 1.9 million. Statistics compiled by the Joint Center for housing Studies estimates that housing costs can be classified as a severe burden for 15.6 million low and middle income households across the country. Housing trusts like the ones Senator Clinton talks about support subsidized rental housing and safety net housing, as well as nonprofit developers.
Senator Clinton has already proposed a plan earlier this year that is meant to address the problems involving subprime mortgages. At this time she called for more access to counseling, restricting prepayment penalties, getting rid of the fine print in contracts and promoting a foreclosure timeout, a time for both parties to try to come to a resolution, The new plan is meant to supplement the original one and make it stronger
Spource: Hillary Clintion.com http://www.hillaryclinton.com/