A plan to apply first aid to the troubled housing market picked up momentum on Capitol Hill this week, and the Bush administration even signaled it might support some version of the measure. The bill passed a procedural vote in the Senate 83-9 on Tuesday. A similar measure already has passed the House. Congress and President Bush should come to agreement quickly and enact this much-needed relief.
Congress is feeling pressure to act as the housing market continues to drag down the economy as a whole. A closely watched barometer of housing activity, the Standard & Poor's/Case-Shiller Home Price Indices of 20 cities, showed Tuesday that home prices fell 15.3 percent in April compared with a year ago, and nearly 8,000 new foreclosures a day are being recorded nationwide.
The bill would allow qualified borrowers to refinance into more affordable federally guaranteed 30-year, fixed-rate loans.
Only borrowers seeking to remain in their primary homes would be eligible - not speculators or owners of vacation homes - and their lenders would have to write down a portion of their principal. Homeowners also would have to prove they have the income and creditworthiness to afford their new loans.
The bill would allow first-time buyers to receive a tax credit of up to $8,000 on the purchase of an unoccupied home. It also permanently would increase loan limits for the mortgage finance giants Fannie Mae and Freddie Mac and provide $150 million to expand counseling to prevent foreclosures.
For the good of the nation's economy and its neighborhoods, Congress should pass this measure, and Bush should sign it.
Reprinted from The Milwaukee Journal Sentinel.
