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Summary

As evidenced by the numerous bills introduced in the 110th Congress during the first session, there is much concern over recent developments in the housing and mortgage markets. Bills such as H.R. 3019, the Expand and Preserve Home Ownership Through Counseling Act (Representative Judy Biggert) and H.R. 3666, the Foreclosure Prevention and Home Ownership Protection Act (Representative Betty Sutton et al.) include sections that speak specifically about foreclosures. These bills would authorize studies on current defaults and foreclosures, as well as possible causes. This report provides a general analysis and overview of current foreclosure issues addressed in the bills cited above. It begins with a description of the behavior of aggregate foreclosure rates. The behaviors of foreclosure rates are placed in the context of activity in the housing and mortgage market to illustrate any relationships. The foreclosure process is then explained, first from the point of view of a traditional financial lending institution, and then from the viewpoint of securitization when loans are sold in secondary markets. Finally, this report collects information from other studies to obtain an estimate of the average foreclosure costs. A brief discussion of the effect uniform foreclosure legislation may have on costs follows.

Related Legislation:
• H.R.3019
• H.R.3666

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