Foreclosure Relief Legislation Will Be Vetoed By Bush

May 15th, 2008

Foreclosure relief legislation will be vetoed by Bush as he is of the strong opinion that the steps being considered by the Congress will only help those who should not be helped – the speculator and lenders. It took the Democrats by surprise who were under the impression that the aForeclosure relief legislation will be vetoed by Bush as he is of the strong opinion that the steps being considered by the Congress will only help those who should not be helpeddministration would support the primary clauses of the bill. After consultations with the Republicans in the Congress, Bush made this cursory announcement about rewarding speculators and lenders. He unambiguously stated that he would ‘veto the bill that is moving through the House’ if it reached his desk. He urged members on both sides to rather concentrate on a law being pushed through by the Republicans.

The Democrats complained that the legislation regarding giving of federal support for foreclosure prevention and expediting of mortgage refinancing had been drawn up after lengthy consultations with the Bush government. This sudden announcement of veto came as a surprise.

The chairperson of the Senate Banking Committee, Senator Christopher J. Dodd (D-Conn) said that the veto threat was totally unexpected. All that he knew was that the Bill had received the ‘guarded support’ of the President. Dodd also observed that the chairperson of Federal Reserve, Ben Bernanke had been categorical in his agreeing with the core principles of the bill. He cryptically wondered who the President was listening to while saying that he was going to veto a bill that wasn’t even ‘developed over her.’

In the following week Dodd’s committee is set to deliberate on the foreclosure prevention legislation. The House Financial Committee has already passed two bills. These two would now face vote on the floor of the House on Wednesday. The bill under contention, the main one, will allow the FHA to give support to $300 billion for refinancing mortgages for those borrowers whose loan amount is greater than the house mortgaged. To qualify strict preconditions would be laid. The lenders would have to agree to bring down the principal loan to the current value of the house. The previously passed legislations that have already been taken to make basic changes to the FHA would be reaffirmed in the bill. It would also extend the scope of Fannie Mae and Freddie Mac.

Another bill would grant $15 billion to local governments besieged by foreclosures in some localities. With the money foreclosed houses would be purchased. Bush had previously expressed his reservations about this bill also.