With home foreclosures expected to increase in 2008 as the moment wave of variable interest rate mortgages reset, an influential member of Congress is expected to introduce legislation that would enable the Federal Housing Administration to buy at-risk loans, enabling them to be refinanced and preventing homeowners from being foreclosed upon, The Financial Times reported Wednesday.

U.S. Congressman Barney Frank, D-Massachusetts and chairman of the House Financial Services Committee, is floating a $15 billion initiative that would authorize the FHA to buy as many as 1 million at-risk mortgages, The FT reported.

Some loans, such as those for investment properties and vacation homes, would not be eligible for the program.

The overlooked FHA

Overlooked during the “Roaring 1990s” profitable expansion and that decade’s housing boom, the Federal Housing Administration is a Depression-era agency that insures loans made to borrowers with poor credit.

Continue reading As home foreclosures rise, some in Congress eye FHA refinance plan

Original post by Joseph Lazzaro

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