New legislation that may impact loan modification applications down the line has been introduced by senators Kay Hagan (D-NC) and Bob Corker (R-TN). The legislation is intended to assist with the creation of an American backed bond market and has been co-sponsored by Mike Crapo (R-ID) and Chuck Schumer (D-NY). The legislation in question, named The Hagan-Corker United States Covered Bond Act of 2011 develops a legislative foundation that boosts funding avenues for American financial institutions.
According to Schumer, backed bonds are a sensible solution in the context of a housing market that is still reeling from a major crisis. He went on to say that an American covered bond market would make it possible for more American investors to utilize their financial resources to boost the U.S. economy. Why should these investors be investing in bonds in other areas, as they are in the process of doing, when they could be investing in the domestic market, in the opinion of Schumer.
Sen. Hagan pointed out that America trails in the wake of its global peers in the bond market arena due to the fact that a legislative foundation for issuers and buyers is lacking. With the proper foundation in place, Hagan believes that American institutions will be provided with a powerful tool that can be utilized to back loans to American families as well as small companies that are in need of funding. Hagan stated further that the legislation would serve the purpose of creating a level playing field for U.S. companies, and strengthening the country’s economy in the process.
Theoretically, covered bonds give American institutions a key tool when it comes to establishing solid, sustainable funding from private capital markets. The idea is that the funding that is made available by covered bonds would give American financial institutions the capacity to make long-term and sturdy credit available to individuals, small companies, and even governments. The new legislation enjoys bi-partisan support in the House as well as the Senate.
While it may be true that a bill of this nature may bring about some much needed stability to the U.S. economy, at least theoretically, it is not likely that any positive impact can be expected immediately. The ramifications of a development of this nature will take a period of time to work their way through all sectors of America’s economic landscape. This means that homeowners who are in need of a loan modification would be wise to continue their application process. The challenges that face the housing market and the economy as a whole are too severe and widespread to allow for any realistic expectation of immediate relief.
The stubborn unemployment rate that is affecting almost 10% of all Americans continues to make a strong case for the incredible importance of an effective loan modification strategy. The ripple effects of the housing market and financial crises are going to be experienced by American homeowners for quite a few years to come. Hopefully, legislation of this nature will help ensure that the challenges facing millions of Americans do not continue indefinitely.
If you are in need of a loan modification, or are currently applying for one, feel welcome to share your story and experiences on Twitter, Facebook, or Mycaal.com with numerous homeowners just like yourself who are intent on saving their home and their American dream.
About Carla Ghosn
|CEO and Founder of Caal (mycaal.com) keen on helping American homeowners save their home. If you need help with your loan modification, visit www.mycaal.com to get help on pre-qualifying your loan for approval, as well as preparing and printing your loan modification package online.|