lily
03-20-2008, 04:27 AM
Big business vs. the shrinking middle class. (http://www.washingtonpost.com/wp-dyn/content/article/2008/03/19/AR2008031903275.html?hpid=moreheadlines)
Democrats, Bush Square Off Over Housing Relief
President Resists Wide-Scale Assistance
By Jeffrey H. Birnbaum and Lori Montgomery
Washington Post Staff Writer
Thursday, March 20, 2008; Page D01
Now that the Federal Reserve has pledged billions of dollars to rescue Wall
Street bankers from possible default, lawmakers and regulators are turning
their attention to helping average citizens -- from homeowners in danger of
foreclosure to people who want to buy a home.
Bush officials are working with lawmakers on proposals that would help new
home buyers and small investors by strengthening rules that govern mortgage
lending.
The House, meanwhile, plans to move within weeks to approve a
multibillion-dollar program to prevent hundreds of thousands of home
foreclosures. The outlook for the plan, the most ambitious of several
proposals, is uncertain; President Bush continues to resist large-scale
legislation to bail out homeowners in distress.
"We have not seen any new ideas out there that we're willing to support,"
White House spokesman Tony Fratto said.
But Democratic congressional leaders and industry lobbyists do not see the
president as immovable and expect that he will compromise eventually, pushed
by Treasury Secretary Henry M. Paulson Jr. and other senior officials in his
administration. "I think Paulson understands you need to move," said Rep.
Barney Frank (D-Mass.), chairman of the House Financial Services Committee.
"But Paulson can't move as quickly as the rest of us."
Industry representatives agree. "There's real fear about where this crisis
is going to end up," said Francis Creighton, a senior lobbyist for the
Mortgage Bankers Association. "This administration appears to be ready to do
what it needs to address this crisis."
On Sunday night, the Fed backed J.P. Morgan Chase's acquisition of the
wounded investment firm Bear Stearns, promising to take the risk of up to
$30 billion in troubled assets now on Bear's books, and increased the flow
of money to other banks pinched for credit. The Fed could move quickly
because it is sheltered from the politicking that surrounds administration
and congressional initiatives.
So far, the administration is trying to work with the authority it already
has. Yesterday, federal regulators increased the flow of mortgage money by
giving the federally chartered mortgage finance giants Fannie Mae and
Freddie Mac permission to increase their investment in mortgages by a
combined $200 billion. That will improve the availability and affordability
of home loans, the companies said.
Congressional Democrats said they want to do more and intend to press the
president to accept their plans. "Democrats believe that the time is now to
build on the Fed's efforts by taking action to ease the economic burdens
facing everyday Americans," House Speaker Nancy Pelosi (Calif.) said in a
statement. Senate Majority Leader Harry M. Reid (Nev.) added: "While it is
important to calm the turmoil on Wall Street, we must just as urgently help
the families and communities on Main Street who are threatened by this
mortgage meltdown."
The Democrats are homing in on a proposal advanced last week by Frank and
Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.). Under the
measure, the Federal Housing Administration, which helps provide low-cost
home loans, would be given a key role in helping renegotiate distressed
mortgages and would provide insurance for up to $300 billion in new
mortgages.
The program would target homeowners who are solvent and can afford
reasonable mortgages, but who face foreclosure because their loan costs are
escalating while the value of their homes is declining. A homeowner could
seek help from an FHA-approved lender, which would determine the home's
value and how much the homeowner could pay. The mortgage holder would be
asked to accept the lower payment to clear the old mortgage, and the new one
would be insured by the FHA.
Democrats, Bush Square Off Over Housing Relief
President Resists Wide-Scale Assistance
By Jeffrey H. Birnbaum and Lori Montgomery
Washington Post Staff Writer
Thursday, March 20, 2008; Page D01
Now that the Federal Reserve has pledged billions of dollars to rescue Wall
Street bankers from possible default, lawmakers and regulators are turning
their attention to helping average citizens -- from homeowners in danger of
foreclosure to people who want to buy a home.
Bush officials are working with lawmakers on proposals that would help new
home buyers and small investors by strengthening rules that govern mortgage
lending.
The House, meanwhile, plans to move within weeks to approve a
multibillion-dollar program to prevent hundreds of thousands of home
foreclosures. The outlook for the plan, the most ambitious of several
proposals, is uncertain; President Bush continues to resist large-scale
legislation to bail out homeowners in distress.
"We have not seen any new ideas out there that we're willing to support,"
White House spokesman Tony Fratto said.
But Democratic congressional leaders and industry lobbyists do not see the
president as immovable and expect that he will compromise eventually, pushed
by Treasury Secretary Henry M. Paulson Jr. and other senior officials in his
administration. "I think Paulson understands you need to move," said Rep.
Barney Frank (D-Mass.), chairman of the House Financial Services Committee.
"But Paulson can't move as quickly as the rest of us."
Industry representatives agree. "There's real fear about where this crisis
is going to end up," said Francis Creighton, a senior lobbyist for the
Mortgage Bankers Association. "This administration appears to be ready to do
what it needs to address this crisis."
On Sunday night, the Fed backed J.P. Morgan Chase's acquisition of the
wounded investment firm Bear Stearns, promising to take the risk of up to
$30 billion in troubled assets now on Bear's books, and increased the flow
of money to other banks pinched for credit. The Fed could move quickly
because it is sheltered from the politicking that surrounds administration
and congressional initiatives.
So far, the administration is trying to work with the authority it already
has. Yesterday, federal regulators increased the flow of mortgage money by
giving the federally chartered mortgage finance giants Fannie Mae and
Freddie Mac permission to increase their investment in mortgages by a
combined $200 billion. That will improve the availability and affordability
of home loans, the companies said.
Congressional Democrats said they want to do more and intend to press the
president to accept their plans. "Democrats believe that the time is now to
build on the Fed's efforts by taking action to ease the economic burdens
facing everyday Americans," House Speaker Nancy Pelosi (Calif.) said in a
statement. Senate Majority Leader Harry M. Reid (Nev.) added: "While it is
important to calm the turmoil on Wall Street, we must just as urgently help
the families and communities on Main Street who are threatened by this
mortgage meltdown."
The Democrats are homing in on a proposal advanced last week by Frank and
Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.). Under the
measure, the Federal Housing Administration, which helps provide low-cost
home loans, would be given a key role in helping renegotiate distressed
mortgages and would provide insurance for up to $300 billion in new
mortgages.
The program would target homeowners who are solvent and can afford
reasonable mortgages, but who face foreclosure because their loan costs are
escalating while the value of their homes is declining. A homeowner could
seek help from an FHA-approved lender, which would determine the home's
value and how much the homeowner could pay. The mortgage holder would be
asked to accept the lower payment to clear the old mortgage, and the new one
would be insured by the FHA.