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Washington, DC -- Congressman Steve Kagen, M.D. is making it easier for families to stay in their homes and was successful in putting into place necessary counseling aimed at returning veterans from the Iraq and Afghanistan conflicts.
Working with both Republicans and Democrats, Kagen authored a provision in the American Housing Rescue and Foreclosure Prevention Act that would provide grants for mortgage foreclosure and credit counseling for veterans recently returning from active duty through the Neighborhood Reinvestment Corporation.
“This act is not a hand-out, it is a hand-up,” said Kagen. “Our soldiers need our help now, and I am pleased that the American Housing Rescue and Foreclosure Prevention Act will assist returning soldiers to avoid foreclosure.”
The American Housing Rescue and Foreclosure Prevention Act (H.R. 3221) would establish a new program, under which the Federal Housing Administration (FHA) would guarantee refinanced loans for at-risk mortgages. The government would be liable for the balance of the mortgage only if the borrower defaults on the new loan – and if the mortgage lender agrees to write off at least a 15% of the original mortgage. It would also establish new reforms in federal agencies, such as Fannie Mae and Freddie Mac, which dominate the secondary mortgage market.
The package would also provide first-time homebuyers a refundable tax credit that acts as an interest-free loan of up to $7,500 (to be paid back over 15 years), supply states with $10 billion of additional tax-exempt bond authority in 2008 to refinance sub-prime loans and offer taxpayers that claim the standard deduction with up to an additional $700 standard deduction for property taxes.
“Foreclosure rates have risen, housing prices are declining, too many families nationwide including many Iraq and Afghanistan veterans are overwhelmed with their monthly mortgage payments and many have fallen into the Adjustable Rate Mortgage trap. Preventing foreclosures for our veterans will benefit all communities. More importantly, by providing additional counseling and resources to veterans, we will enhance their ability to make sound financial decisions during these challenging times,” said Kagen.
Congressman Kagen will be at NeighborWorks in Green Bay, WI tomorrow at 2:00 PM to meet with constituents who may benefit from this important legislation.
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