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Jeanne Sahadi, a senior writer for CNNMoney.com,
released an article online today with the following
headline: "Senate
deal struck on mortgage aid - Plan would let
government back loans for at-risk borrowers. Key
lawmakers reach compromise - taxpayers will not be on
the hook if loans go bad." Sounds promising, ehh?
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Homeowners definitely need some good news out of
Washington especially after all of the failed attempts
thus far to calm to foreclosure crisis. This
legislation, however, is far from a done deal. It still
has to come to a vote before the Banking Committee
tomorrow (05/20/08). As the bill is a compromise between
the two leading politicians on the board, Senator Chris
Dodd (D-Conn.) and Senator Richard Shelby (R-Ala.), it
is most likely that it will find little opposition in
that vote. Senator Dodd also feels that he can get the
votes need to pass in the Senate and make it to
President Bush before the July 4 congressional recess.
There is, however, concern about President Bush's
reaction to the bill. No official statement has been
released by the White House yet, but President Bush has
voiced strong veto threats against similar bills.
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There are also not enough details in the article about
the bill to come to knowledgeable opinion on the bill.
The article states "at-risk borrowers", but how does the
bill define at-risk borrowers? An article is also posted
on Senator Dodd's official web site (read
article), but details are not given there. Worrisome
also is the statement that the loans are voluntary. From
my personal experience in dealing with the banks,
voluntary means that they will take no action except to
turn your loan over to a collection office and attorney
to file foreclosure.
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While I will be watching this legislation very closely
(and you should, too), I am not making any plans on
legislation that is not clearly defined in detail and
has not even passed the Senate yet - you should do the
same. As soon as I can find more information, I will
post it on this web site. Sign up on the comment page to
be notified of updates.
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