Cap seals House foreclosure aid compromise

April 24, 2008 at 10:49 AM

WASHINGTON, April 24 (UPI) -- U.S. House of Representatives members reached a compromise over a formula for distributing $15 billion in foreclosure aid, finance leaders in Washington said.

The formula will take both median home prices and the percentage of the nation's foreclosures into consideration but will also impose a cap on how much one state can receive, Politico, a Washington publication, reported Thursday.

Without the cap, California, home of House Speaker Nancy Pelosi, would have received nearly one-third of the entire bill, Politico said. California has the most foreclosures in the nation but the median price of homes there is also higher than it is in many states.

The formula without the cap" discriminates against many of the states hardest hit by the subprime mortgage crisis." U.S. Reps. Steven C. LaTourette and Deborah Pryce, both Ohio Republicans, wrote in a letter to U.S. Rep. Maxine Waters, D-Calif., who sponsored the original bill.

The compromise bumped Ohio's share from $436 million to $586 million. It also increased Florida's share by $310 million, Michigan's by $160 million and Pennsylvania's by $73 million, Politico reported.

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