Using Tax Breaks To Force Loan Revisions, Prevent Foreclosures [Housing Tracker]

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Government Foreclosure Help

Federal Dollars Tied To Foreclosures. “Sen. Jay Rockefeller has taken steps to make sure inaccurately low foreclosure statistics do not cost West Virginia millions in Medicaid and mortgage relief dollars… Rockefeller was reacting to a survey that showed that RealtyTrac - the nation's most-reported source of foreclosure statistics - dramatically undercounts West Virginia foreclosures. RealtyTrac counted only one in five West Virginia foreclosures in 2007... The federal government will use the foreclosure rate to help determine West Virginia's share of $4 billion in federal mortgage relief dollars Congress recently approved. The higher the rate, the more funding a state receives.” (Charleston Gazette, Sept. 25)

Help Sought For Struggling Homeowners. “Several ideas have been floated for helping homeowners who are facing foreclosure, including [having the] federal government revise the mortgages it would acquire under the Bush administration's proposal to buy up mortgage-backed securities stuffed with bad loans. But those securities… are similar to corporate bonds, meaning that you can't force changes in most cases unless you hold two-thirds of the securities… Andrew Jakabovics, associate director of the economic mobility program at the Center for American Progress, a liberal-leaning think tank, said that problem could be addressed by the government threatening to remove a favorable tax provision for mortgage-backed security trusts that do not cooperate.” (LA Times, Sept. 25) 

Official: Ohio Voters In Foreclosure Can Vote. “Ohio Secretary of State Jennifer Brunner is reminding local elections boards that voters who have homes in foreclosure should not be prohibited from casting ballots for the Nov. 4 presidential election [and] that a voter's registration status cannot be challenged simply due to involvement in a foreclosure. Brunner says returned mail that can't be forwarded is also insufficient for a challenge, and all challenged voters are entitled to a hearing. Last week, Obama for America, the Democratic National Committee and several Michigan voters filed a federal lawsuit in Detroit seeing an injunction prohibiting Republican officials from challenging voters whose homes are on foreclosure lists.” (Chicago Tribune, Sept. 24) 

FHA Limits 'Buy And Bail' Purchases. “The Federal Housing Administration will no longer count rental income when home buyers choose to vacate, rather than sell, their principal residence. Home buyers seeking to rent out their existing home and buy another with an FHA-backed mortgage must now demonstrate they have sufficient income to pay both mortgages. The FHA won't allow lenders to count rental income for the home being vacated unless borrowers have a 25% equity stake or can prove they are relocating for employment and obtain a one-year lease on the home being vacated. The new rules are intended to prevent the practice known as "buy and bail," where the buyer purchases a more affordable dwelling with the intention to cease making payments on the previous mortgage.” (Inman News, Sept. 24)

                                                               

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