Bush threatens Veto of Foreclosure Legislation

Posted on May 16th, 2008 by saman

On May 7 President Bush said that he would veto certain foreclosure legislation that is being considered by Congress. This surprised Democrats who thought that the administration would support the foreclosure legislation. In some brief remarks during a meeting with Republicans, Bush said he would veto the foreclosure legislation. He complained that the legislation would give a reward to lenders and speculators.

President Bush stated that he would veto the bill if it comes to his desk. He also said he would urge members of Congress to focus on legislation that would be sponsored by Republicans. Democrats have stated that the legislation package that would give governmental support to prevent foreclosure and assist mortgage refinancing was drafted with the help of the Bush administration. Democratic senators said that the threat of veto was not expected and it was thought that the bill had the support of the president. The Federal Reserve Chairman expressed support for the core of the bills. A senator has said that for the president to say he is going to veto the bill is strange and he doesn’t know who the president is listening to. The legislation would be deliberated soon. Two foreclosure bills that have passed the Financial Services Committee, and will be voted on shortly. The main foreclosure bill would let the Federal Housing Administration guarantee three hundred billion dollars in refinanced mortgages. This would help home owners who could not pay their mortgages. These mortgages are higher than the value of the home. In order for homeowners to take advantage of the help of the FHA, they need to meet financial criteria that is strict and their mortgage holders have to agree to rewrite the principal on the mortgage that is beneath the current value of the home. The foreclosure bill would include legislation that has been previously passed that will improve the FHA and will increase oversight of mortgage holders that are chartered by the government. This includes such organization as Freddie Ma and Fannie Mae. Another bill would give fifteen billion dollars to local governments in hard hit areas that pursued the purchase of homes that have been foreclosed on and improve and repair them for resale. Because President Bush said that the bill would help banks and not homeowners, he said he would veto the measure. Some democrats say that the belief that the bill would help banks and lenders is strange. He said that properties that are foreclosed on have formerly been used to pay taxes. They now absorb them.

This congressman has said that the administration is being hypocritical by complaining about giving fifteen billion dollars to help local governments when the Federal Reserve paid thirty billion dolls to help stop the collapse of Bear Stearns. Bear Stearns was brought to the edge of collapse when the securities that were mortgage-backed lost their value.

The housing legislation being considered was significantly delayed by procedural delays on the part of Republicans. The republican lawmakers were upset that they were not given enough time to amend different bills that relate to the funding of the war in Iraq.