Families in fear of having their homes foreclosed due to mortgage problems can now breathe easier as a foreclosure rescue bill passed a key Senate test on Tuesday, June 24.

The bill, which got an 83-9 vote, would enable the Federal Housing Administration (FHA) to help out about 400,000 distraught families currently experiencing financial problems. Through the bill, new and more affordable home loans that can amount up to $300 billion will be available to borrowers.

Problems in paying mortgages caused more and more people to be subjected to home foreclosures. Factors like high interest rates, “fixed rates” that turn out not to be fixed at all, and the recent storms that devastated certain parts of the country added to the woes of American homeowners.

The bill, once signed, would make borrowers eligible for the foreclosure relief provided that their mortgage holders will allow them to refinance and attest that they have the capability to pay for the new loan. It would also require holders to take in sizeable losses. And if the property is sold or refinanced, the government would have to partly profit from it.

The lending measure would also bestow upon Fannie Mae and Freddie Mac tighter management control, and help first-time buyers by giving them up to $8,000 in credit to purchase homes in the following year. It would also improve low-income tax credits and revenue bonds and make possible $14.5 billion in tax breaks.

Banking Committee chairman Sen. Christopher J. Dodd, D-Conn. says the lending measure “would allow us to begin to put a tourniquet on the hemorrhaging of foreclosures in this country.” He also stated that there is a need to show Americans that something can be done to solve the problem.

However, the bill may just encounter several roadblocks. President Bush has threatened to veto the bill, while Democrats are bickering over important details in the bill.

Issues were also raised by certain groups. The “Blue Dogs”, who are conservative Democrats, is worried about financing the proposal while the Congressional Black Caucus stressed that the measure is not enough to address Black Americans’ needs. There is also a disagreement over placing loan limits to government mortgage insurance and financing. The Senate bill has them at $625,000 while the House version is at $730,000.

To top it all, a number of Republicans look at the bill as a sort of favor for careless lenders and investors. Sen. Mike Enzi, R-Wyo. emphasizes how this supports the very people responsible for the housing market decline by turning its back on responsible lenders and borrowers. “This bill is a federal government bailout,” he says.

Despite the hurdles the bill is currently facing, lawmakers are in the process of working closely with the Bush administration to avoid a veto especially since both the Congress and Senate’s versions of the bill were “on the right path” and had “some really good aspects”, according to White House spokeswoman Dana Perino.

WASHINGTON - The housing crisis seems to be far from over. In fact, it may have just gotten worse as more and more real estate brokers were apprehended by the Federal Bureau of Investigation for suspected mortgage fraud that duped oblivious home buyers and took more than $1 billion from them.

The FBI announced in a recent news conference that “Operation Malicious Mortgage” resulted to the arrests of more than 400 real estate brokers in Chicago, Atlanta, Miami, and Maryland on charges of mortgage fraud. Together with the Justice Department, the FBI announced that 406 defendants were charged in 144 mortgage cases as a result of the operation which started making arrests Wednesday morning.

Mortgage fraud is said to be a major contributing factor to the worsening housing crisis. Victims of these fraudulent brokers suffered terribly as they soon found out that their mortgage loan’s fixed-rate wasn’t really “fixed” at all as it went up after a period of time. When the rate increased and the homeowners failed to pay, foreclosure action was not too far behind.

In Wisconsin alone, 2,200 homes were foreclosed in just a month. Areas like Milwaukee upped its foreclosure rate to 53 percent, Waukesha County by 46 percent, Ozaukee by 16 percent, and Washington County by 20 percent.

Studies show that 55 homes face the risk of foreclosure every day. According to a report by foreclosure listing company RealtyTrac Inc., the number of foreclosure filings by Americans rose to nearly half from last year. In May, 261,255 homes got at least one foreclosure-related filing in May, which was 48 percent higher than the same period last year.

Because of increasing mortgage rates plus plummeting property values and weak home sales, the housing crisis seems to be taking a turn for the worse. And because a lot of people can’t get a more affordable refinancing loan, they now face foreclosure risk.

“Mortgage fraud and related securities fraud pose a significant threat to our economy, to the stability of our nation’s housing market and to the peace of mind of millions of American homeowners,” said Justice Department Deputy Attorney General Mark R. Filip.

The FBI vowed to continue its efforts to curb and prosecute mortgage fraud.

It’s not enough that soldiers risk their lives to protect and defend their country; now, they have to worry about losing their homes, too. According to an article by Bloomberg, mortgage defaults have become an alarming trend in towns populated mostly by soldiers and their families, with foreclosures shooting up at a rate that’s quadruple the national average.

A major culprit? Subprime loans and the lure of their low, initial interest rates attracted thousands of military families, many of whom were ideal targets of subprime mortgages because of their poor credit scores, frequent moves, and low incomes. And as interest rates climbed higher and higher over the years, the monthly rate for subprime mortgages rose as well, trapping servicemen and their families into mortgage commitments that they could no longer keep up with.

And although the Servicemembers’ Civil Relief Act was designed to help servicemen avoid foreclosure caused by unpaid mortgage bills, the act itself protects only those who are on active duty. Even then, the grace period for settling all the paperwork lasts for only 90 days after the soldiers or sailors come back from service; hardly enough time to fix all the snarls, insist some Congressmen, a number of whom are already rallying for a year-long extension for members of the military.

More important than the wrangling at Congress, however, is the welfare of U.S. servicemen. “We fought for our country, and now we have to fight to save our homes,” said laments Iraq war veteran Monique Kelly. “After living with the stench of death in Iraq, it seems like we shouldn’t have to face problems like this when we come back.”