There was a welcome addition to the “Safeguarding the American Dream” symposium held in Washington D.C. yesterday.  The Mellman Group released the results of their most recent poll concerning The Expanding American Homeownership Act.  The poll was commissioned by Wells Fargo and surveyed the opinions of 1000 adults across the nation, the results of which are heavily in favor of the Act.

Not surprisingly, most Americans (52%) don’t know anything about this act.  However, after hearing a brief description 80% are in favor of the Act while just 12% opposes it.  It was found that African Americans were more knowledgeable about the Act.  Sixty-five percent of African Americans were aware of the Act, compared to the slight minorities of whites and Hispanics, 45% and 49% respectively.  Not only were African Americans more aware of the Act, but they are also substantially more in favor of it.  Before hearing a brief description of the Act, 43% of African Americans favored the bill as opposed to 23% of whites and 30% of Hispanics.  After hearing the description, favorability of the bill jumped in all demographics, but African Americans were still more in favor of the Act (88%) than whites (78%) and Hispanics (81%).

The Expanding American Homeownership Act is a response to the recent downturn in the subprime mortgage loan industry.  Public backlash towards predatory loans has created a huge demand for expanding the powers of HUD and the Federal Housing Administration, which would allow for more government assistance to those with less than perfect credit.  The Expanding American Homeownership Act would raise loans limits and areas with higher costs of living, such as New York and California.  Some amendments have even considered eliminating the mandatory 3% downpayment required for all FHA loans.  A similar bill was introduced last year and while it passed the House it failed in the Senate.  The new Congress and the shift in public support will play key factors in whether or not the bill passes this year.

Private lenders, federal officials and other stakeholders are starting to kick up education efforts for homeowners feeling the crunch of the subprime mortgage crisis and the rising number of defaults nationwide.

A recent conference in Texas sponsored by the Federal Reserve of Dallas showcased some of the outreach programs underway or being considered to help educate and comfort homeowners.

Wells Fargo has already begun contacting subprime borrowers and alerting them to the company’s Steps to Success Program, according to a story about the conference in the Houston Chronicle. Two other companies, EMC Mortgage Corp., and Countrywide Home Loans, the nation’s largest mortgage lender, have also created outreach and counseling programs to help reach out to homeowners.

Even the Federal Housing Administration is getting in on the act. The FHA has started sending out letters to its borrowers in cities with high rates of foreclosure, extending offers to attend education seminars and meet with housing counselors.

During the conference, mortgage finance giant Freddie Mac presented a survey that showed nine in 10 homeowners would contact their lender if they knew there were alternatives to foreclosure available, according to the Chronicle.

To learn more about ways to avoid foreclosure, contact one of the lending experts at Mortgage Loan Place today.

Many states are now working on their own relief measures to help borrowers hurt by the continuing crisis in the subprime mortgage market.

Some are looking at programs that help provide education and financial incentives for borrowers, while others are considering greater scrutiny of lending agencies and vendors.

According to Reuters, loan agents in Minnesota and Ohio have a duty to match borrowers with low cost mortgages under recently-passed laws. Oregon and Maine could soon have similar measures. Meanwhile, Ohio approved a new bond issuance to save homeowners facing foreclosure while California and Minnesota are also considering some direct aid, the news agency reported.

Overall, more than 20 states are legislation in the works or have passed bills that help address the needs of subprime borrowers. New laws and programs are coming at the state level first, as federal officials continue to explore ways to help fix the subprime system.

“The states are the laboratory,” Paul Richman, a government affairs executive with the Mortgage Bankers Association, told Reuters. “Washington lawmakers have a great respect for them and look there for ideas for a national solution.”

This spring, legislation aimed at limiting the reach of subprime lenders was introduced into Congress.

The Predatory Lending Practice Reduction Act of 2007 calls for federal certification of mortgage brokers and agents and harsher penalties for violations. Foreclosure or failed mortgages will strike more than 2 million American homeowners in the subprime market by the year’s end, according to the Center for Responsible Lending, a nonprofit advocacy group. The cost in lost equity will near $164 billion.

While the push for federal legislation has become a crawl, more and more states and mortgage stakeholders are touting the benefits the Federal Housing Administration may offer borrowers struggling with the subprime crisis.

As the subprime crisis rolls on, it’s becoming clearer every day that the Federal Housing Administration can play a pivotal role in providing people with relief.

In fact, at least one national group expects the FHA to become a savior for people struggling with the continuing calamity.

The National Association of Mortgage Processors, or NAMP, recently predicted that the FHA and its loans will take over for subprime mortgages.

“As the government’s largest mortgage program, the Federal Housing Administration loan has been basically a low-down payment source for first-time home buyers with issues with their credit, but who could fully document their income and assets,” the NAMP said in a statement.

In addition, a proposed overhaul of the FHA could make government-backed loans every more tenable for homeowners.