CanadaNews’ Reporter Notes

The Senate is trying to save the day.

Those who are struggling with potential foreclosures on their homes may have a new opportunity to refinance their mortgages, with a little help from the Senate. The U.S. Senate passed its version of a housing-crisis rescue today. This was done after some potential tweaks in the House, the bill soon could head to the president’s desk.

Just about every conceivable procedural delay known to the Senate has been thrown at this massive housing bill.

The portion that will give the most aid to people suffering during this unfortunate time is the foreclosure aid component. One of the democratic senate giants that pushed for this is former presidential candidate Sen. Christopher Dodd, D-Conn. Dodd has made the housing bill his focus after giving up his presidential run. After the bill passed, 63-5, a relieved Dodd was quoted as saying, “I think everyone felt this was a time we really have to come together.”

It is believed that Dodd worked diligently on this bill for two reasons: 1) he has a heavy heart for those who are truly in need; 2) Dodd is being vetted as a possible vice president on Obama’s ticket. Senator Dodd has confirmed that he has provided personal information to the Obama campaign.

Many feel the idea of Obama reaching out for Dodd is unlikely due to the Countrywide Financial Corp. loan scandal that struck Dodd in recent weeks.

Whatever the case, Dodd has pressed on with his high-stakes legislative issues.

Patty Briotta, with the National Association of Federal Credit Unions released a comment in reference to the bill. She says:

“NAFCU is pleased to see the process toward enacting H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act of 2008, moving forward by the Senate action today,” said NAFCU Associate Director of Legislative Affairs Amanda Slater. “Still, NAFCU believes the House-passed language pertaining to portfolio regulation, effective date, and conforming loan limits is preferable and urge that it be included in the final package. We also urge the adoption of the language from Senator Crapo’s amendments offered in the Senate that would address the merchant card reporting provision of the bill. This provision would increase the regulatory burden on credit unions that process these transactions, and should be struck from the final bill.”

Below are the basics of the foreclosure help:

It’s a voluntary program that requires agreement between a troubled borrower and a lender. The lender has to agree to refinance with a 30-year, fixed-rate loan at less than the current market value of the home. The borrower has to agree to give up part of the profit if he or she sells the home for a gain in the coming years.

The new loans will be backed by a $300 billion guarantee from the government, funded by revenue from government-backed mortgage finance companies Fannie Mae and Freddie Mac. The maximum home-loan value would be raised to $625,000 in the highest-cost areas.

It is important to note that until the president signs the bill into law, the final elements of the Federal Housing Administration-run program — set in the Senate bill to start in October — won’t be settled.

When it does become active, estimates indicate that the program could help as many as 500,000 homeowners.

The housing market has been the victim of a decline in home values while adjustable-rate loans spike to levels unaffordable for many borrowers. Nationwide, more than 8,000 properties enter foreclosure each day.

The bill is considerably a little bit more complex than its temporary foreclosure provisions, which run only through 2012. Mortgage giants Fannie Mae and Freddie Mac will also receive a new government regulator. The bill is believed to modernize the Federal Housing Administration. It will also provide money for local governments to buy foreclosed property in especially troubled areas, among many other provisions.

The local governments will have an opportunity to buy properties in troubled areas and revitalize them (the areas) to generate more revenue, which in turn helps the location

Rep. Barney Frank, D-Mass., who shepherded the House version of the bill, has reportedly predicted that the House can finish its work by the end of the month.

If the House changes the bill, the Senate will need one more vote, which probably won’t be subjected to the same array of delays. Then it goes to the president — hopefully as early as next week, said Dodd, who added that he wasn’t “overly confident” of that timing.

Only 68 senators stuck around late Friday to vote, the level of support indicates that the chamber would have enough votes to overcome a veto; the House would also need to muster a two-thirds majority.