Rescuing the U.S. homeowner?
It finally happened yesterday: The U.S. House of Representatives approved a sweeping measure that provides aid to U.S. homeowners facing foreclosure and assistance to mortgage giants Freddie Mac and Fannie Mae.
Even Pres. Bush dropped his earlier threats to veto such a bill.
The aid package may be good news for homeowners in danger of losing their residences, but it’s also a sign of just how serious the housing crisis is. I’ve interviewed plenty of real estate professionals who’ve continually insisted that there is no crisis, just a normal slowdown in housing appreciation. But if there is no crisis, then why would the federal government, which usually hates to do most anything, approve such sweeping measures?
The legislation’s main goal is to prevent more than 400,000 U.S. homeowners from losing their residences to foreclosure. It does this by allowing them to refinance into lower-cost government-insured mortgages. The legislation also allows the federal government to temporarily increase its lending to the government-chartered, but privately owned, Fanine Mae and Freddie Mac. Members of Congress understand that it would be catastrophic for either Freddie or Fannie to go under.
It’s impossible to predict what impact this legislation will have. But Congress really had little choice but to do something. The housing crisis isn’t lessening. And it’s hurting just about everyone. Maybe this really is a time when government action is not only appropriate, but needed.
Tags: Fannie-Mae, foreclosures, Freddie-Mac, House of Representatives, housing aid, housing crisisRelated Stories
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