The Foreclosure Prevention Act of 2008—a legislative package that aims to help families with an assortment of legislative measures such as allowing judges to modify existing loan terms—is still stirring up debate even though earlier attempts to get the Senate to vote on the measure failed.
When Congress returned Monday, Nevada Sen. Harry Reid (D-NV) reinvigorated the battle cry for the Foreclosure Prevention Act of 2008, saying it “will keep families facing foreclosure in their homes, help other families avoid foreclosure in the future, and help communities already harmed by foreclosure to recover.”

But opposition continues with many Republican representatives and industry associations opposing the bill on the grounds that loan modifications from the bench will reward irresponsible borrowing and lending at the expense of future home buyers who they say will end up footing the cost of the modifications.
Sen. Mitch McConnell (R-KY), in a statement on his Web site, re-stated the position that he, other Republican leaders and the Mortgage Bankers Association (MBA) held in regards to the Foreclosure Prevention Act earlier this year.
“They proposed an ill-conceived plan that will substantially increase monthly mortgage payments on everyone who buys a new home or refinances,” Sen. McConnell said. “Why would Congress want to raise mortgages at a time like thisx There is no way this proposal is going to fly. If Democrats want to help homeowners, they need to work with Republicans on proposals that will draw substantial bipartisan support.”
Under terms of the Act, the government will increase its pre-foreclosure counseling funds by $200 million, allow Housing Finance Agencies to develop refinancing opportunities through the issuing of bonds, allow judges to modify existing mortgage loans to help borrowers, and allow for additional community development block grants to assist with the refurbishing of foreclosed properties.