Congress Still Trying to Clean Up Housing Mess on Taxpayers’ Dime
The Senate voted overwhelmingly (76-10) to advance a mortgage rescue plan to save hundreds of thousands of homeowners from foreclosure. The plan focuses on a $300 billion FHA program to allow homeowners who are currently considered too risky to qualify for government-backed loans to refinance into safer, more affordable mortgages.
The number of “yes” votes means that the bill would escape a veto from the White House. With this in mind, the White House is trying to work out a compromise with the Senate - specifics of a compromise are still not clear.
It is also not clear whether the package will clear the House. One issue that has not been agreed on between the Senate and House focuses on the limits on the mortgages FHA can insure and Fannie Mae and Freddie Mac can buy. The Senate measure caps the limits at $625,000 while the House version would impose a cap of $725,000. Those kind of caps, to me, are crazy. According to a report in the NY Times, the the median home price is $220,000. What kind of lenders are handing out loans to homeowners in excess of $625,000 without verifying ability to pay? I just don’t get it. Apparently, 76 members of Congress do.
