HUD Chief Agreeable To Compromise Formula to Contain Repo Homes

Posted on May 16, 2008
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Roy Bernardi, secretary of Housing and Urban Development is one of the top housing officials of the Bush administration. It is heartening that HUD chief is agreeable to a compromise formula with the Congress for the sole purpose of containing repo homes. He came forward with this view when Bush threatened to veto a housing package.

Bernardi became acting secretary last month after the retirement of Alphonso Jackson in dubitable circumstances. A federal criminal probe has been initiated against him regards contract awards. Bernardi has taken over charges against a background of intense activity to contain the rising engulfing tide of repo homes.

Bernardi categorically states, “Between the Congress and the administration, we want some result.” The steps however must see to the protection of the treasury interests – that is the taxpayer’s money.

The Democrats lead the numbers in the House of Representatives They gave the green signal to a package that would allow Federal Housing Agency to insure up to a limit of $300 billion in refinancing mortgages. This could be done if the lenders agreed to reduce the principal loan amount to more realistic and affordable levels. Bush has threatened to thwart the move with veto. Barney Frank, Democrat from Massachusetts is the architect of this contentious plan. The Republicans argued that it would bail out irresponsible lenders at the expense of the treasury.

FHA and HUD look after the housing sector for the low and middle-income group. It is this group that has been badly hit by foreclosures. These two bodies are the main tools being used in the anti-foreclosure proposals both by the Congress and White House.

Last month the Bush government extended its help operations by allowing modification of loans for those borrowers who are lagging three months behind in payments. Bernardi is optimistic that this will help nearly 500,000 borrowers by the end of 2008. Bernardi stressed that they are in agreement with the basic lines of the Frank plan – it is just that the degree of involvement is raising questions. Frank extends help to all borrowers disregarding their credit scores or whether they are current or not. This is where Bernardi wants a compromise and rethinking formula. Perhaps there could be some sort of understanding in number ratings in credit history. The question of credit past and income proof are pivotal to the issue so as to avoid a repeat of the past mistakes.

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