The latest bill would allow lenders to reduce their
exposure to foreclosures if they agree to cut the outstanding balance of
an existing loan, thus allowing homeowners to refinance into a new loan
that would be FHA insured. The reductions taken by
lenders are substantial and must be based on new appraisals that should
reflect current home pricing levels.
The Bush Administration has
opposed the legislation even though Frank included two measures near and
dear to the president's heart - a revamp of the FHA and
greater government control over Fannie Mae and Freddie Mac.
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