SUNUNU VOTES TO FURTHER HELP HOMEOWNERS, ECONOMY

FOR IMMEDIATE RELEASE:                    CONTACT: BARBARA RILEY

4/10/08                                                              202-224-2841

                                                                        LIZ CHAMBERLAIN

                                                                        603-430-9560

SUNUNU VOTES TO FURTHER HELP HOMEOWNERS, ECONOMY

Senate passes Foreclosure Prevention Act of 2008 

WASHINGTON, DC – United States Senator John Sununu (R-NH) today (4/10) voted to pass the Foreclosure Prevention Act of 2008- legislation that will help struggling homeowners hard-hit by foreclosures, strengthen mortgage disclosure requirements, overhaul the Federal Housing Administration (FHA), and extend tax credits for businesses impacted by the housing slowdown. The U.S. Senate passed the Act by a vote of 84-12. 

“Taxpayers shouldn’t bail out investors or speculators who should have known they were making risky bets. But, it is in everyone’s interest to bring stability to the housing market and avoid a widespread meltdown in the economy. This bill moves us in that direction with several provisions that will positively impact homeownership in New Hampshire and across the nation,” said Sununu, a member of the Senate Finance Committee, who continues to host Home Mortgage Workshops in New Hampshire to help first-time homebuyers and those who are refinancing or facing foreclosure.

“This bill gives state housing finance authorities more flexibility to refinance subprime mortgages. It also fights fraud by strengthening truth-in-lending requirements for new mortgages. Finally, it provides additional counseling services for at-risk homeowners, and gives new homeowners protections and home-buying opportunities to our returning soldiers and veterans. From talking with New Hampshire residents at my Home Mortgage Workshops in Nashua and Manchester, I know first-hand that many of these changes would provide relief in these difficult times,” Sununu continued. “In modernizing the FHA, we can ensure that it provides better mortgage options for low-income and first-time homebuyers as well as affordable refinancing options for those who already own homes. The tax credit for buyers of foreclosed properties will help reduce the inventory of unsold homes and stabilize home prices.”

As passed by the Senate, the Foreclosure Prevention Act of 2008 contains the following provisions:

·       FHA Modernization.  Significant FHA reforms to modernize, streamline, and expand the reach of the FHA program.  Downpayments of 3.5% will be required for any FHA loan and counseling requirements are enhanced to help provide for stable homeownership.

·       Tax Credit for Purchase of Homes in Foreclosure.  A $7,000 tax credit for buyers of such homes, to be claimed over two years.  Sununu is a cosponsor of similar legislation authored by Johnny Isakson (R-GA).

·       Mortgage Revenue Bonds.  $10 billion of Federal tax-exempt private activity bond authority that may be used to refinance subprime mortgages.  The measure also exempts interest earned on the bonds from the alternative minimum tax and includes a Snowe-Bingaman-Sununu Amendment to establish state minimum levels for mortgage revenue bonds.  This doubles the allotment capacity of bonds for NH’s FHA from approximately $47 million to $90 million.

·       Standard Property Tax Deduction.  Increased standard deduction – $500 for single filers and $1,000 for joint filers – for the 28.3 million non-itemizers who pay property taxes.  Present law allows only those who itemize deductions on their Federal tax returns to deduct state and local property taxes from their income.

·       Extension of Net Operating Loss Carryback.  Extension of law allowing corporations to apply excess net operating losses to tax returns from prior profitable years and receive any applicable refunds.  For 2008 and 2009 losses, the provision would extend the “net operating loss (NOL) carryback” to four years (back to 2004 and 2005, respectively) from the two years currently in law. Measures to prevent companies from abusing the intent of the provision are also included.

·       Assisting Communities Devastated by Foreclosures.  $3.9 billion is provided to communities hit by foreclosures and delinquencies.  These supplemental Community Development Block Grant Funds will be used to purchase foreclosed homes, at a discount, and rehabilitate or redevelop the homes to stabilize neighborhoods and stem the significant losses in house values of neighboring homes. 

·       Pre-Foreclosure Counseling.  $200 million in additional funding for housing counseling.  These funds will be distributed by the Neighborhood Reinvestment Corporation by the end of 2008 to ensure families can quickly get the help they need. 

·       Enhancing Mortgage Disclosure.  Expansion of home loans subject to early disclosures under the Truth In Lending Act (TILA), including refinancings. The bill requires a new disclosure that informs borrowers of the maximum monthly payments possible under their loan, and also increases the range of statutory damages for TILA violations. 

·       Nation’s Veterans.  Expanded time frame that lenders must wait before starting foreclosure from three months to nine months after a soldier returns from service and one year relief from increases in mortgage interest rates for returning soldiers. In addition, the Department of Defense is required to establish a counseling program to ensure veterans and active service members can access assistance if facing financial difficulties.  Also included is a provision to increase the VA loan guarantee amount, so that veterans have additional homeownership opportunities. The measure incorporates a Sununu-backed amendment to increase the specially adapted housing benefits for disabled veterans, an initiative that Senator Sununu has strongly backed.