Congress Acts to Ease the Mortgage Crisis

mortgage The mortgage crisis will not go away. Every day more and more houses go on the market because the homeowners cannot pay the high mortgages. Yes, in many cases they were not ready to buy a home and got in over their heads, but a flood of foreclosures on the market on top of what is already for sale, will drive the prices of homes lower and while that may sound good to those looking to buy a home, once the foreclosures are gone, there will be a shortage of homes. If this soulnd like a vicious cycle, that is exactly what it is and today the House of Representatives took measures to stop the cycle.

This is one bill that the Democrats and Republicans almost agreed on. Actually, they both agreed on having the bill, but not on the amendments to it. The bill has a long way to go before it becomes law, but it got its start today when the House Financial Services Committee passed the bill, which will help about 1.5 million homeowners avoid foreclosure, by a vote of 42 to 21, which is pretty much along party lines.

The main reason for the party line split is not because the Republican members were opposed to the bill, but because they wanted amendments such as excluding anyone with bad credit, limiting the program only to those in the low and middle income brackets, and not making it mandatory that the lenders, who would be private banks, absorb any losses which would occur because the government is only going to guarantee 90% of the homes value.

The bill will have a tough go of it because there are Republicans who oppose the bill altogether and the President is not in favor of it either, to put it mildly.

The full house is expected to take up the bill next week, which should make for some interesting sessions involving the question as to whether the tax payers should help bail out their neighbors who are having trouble, or let them solve their own problems. The Democrats will argue that a huge amount of foreclosures will only further damage an already suffering economy. Will the bill pass the house? Probably, but there will be amendments put forth and depending on how they are worded, some may make it into the bill. Then on to the Senate, then the President who is sure to veto it, then back to Congress for an override. We will keep an eye on it because one way or the other it will affect everyone.



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There Are 21 Responses So Far. »

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  2. The bill sounds like a solid plain to help homeowner foreclosures. Hopefully it will pan out well.

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