Porter Provides Options for Sub-Prime Borrowers
February 6, 2008
Washington, DC- As the sub-prime mortgage crisis deepens, Congressman Jon Porter introduced legislation today to implement temporary mortgage financing assistance for families struggling with the current mortgage crisis. Nevada’s third Congressional district is the third fastest growing in the country and has been one of the hardest hit by the sub-prime mortgage crisis.
During 2008, 1.8 million sub-prime borrowers will see their adjustable rate mortgages reset upward, with increases every six months to follow. Nevada has the highest rate of foreclosures in the United States with 1 in 154 homes in foreclosure versus the national average of 1 in 555.
“The sub-prime housing crisis has been a major factor in triggering the economic challenges our country is facing,” Porter said. “Expanding this bonding authority will help ensure that Nevada families keep their homes by offering sustainable refinancing options and bringing greater stability to the market.”
Under current law, state and local governments may issue bonds to finance new mortgage loans for first-time homebuyers. Porter’s legislation would temporarily expand the use of this program to include refinancing of sub-prime loans by temporarily changing Section 143 of the IRS code. The proposal would also allow states to issue up to $15 billion in additional bonds over the next three years, providing homebuyers facing foreclosure the opportunity to refinance at a more reasonable rate. Nationally it is estimated that the proposal would help roughly 80,000 families restructure their loans, according to the National Council of State Housing Agencies.
