By David Nitkin
A White House veto threat is complicating congressional efforts to stem a wave of foreclosures and help more homeowners get into mortgages they can afford.
As lawmakers move ahead on a plan to allow the Federal Housing Adminstration to grant higher loans and to make reforms to Fannie Mae and Freddie Mac, the Bush administration has raised major warnings about the effort. Congress is planning to move the legislation today, according to Congressional Quarterly.
In a Statement of Administrative Policy, the White House called the legislative effort "overly burdensome and prescriptive. It would force FHA and taxpayers to take on excessive risk, and jeopardize FHA's financial solvency."
The White House says it could support some reforms for Fannie Mae and Freddie Mac, but said the House plan, being advanced by Rep. Barney Frank, a Massachusetts Democrat, goes too far.
The housing legislation was one of several topics discussed yesterday during a meeting between Bush and congressional Republicans.
The housing plan "bails out scam artists and speculators," House Republican Leader John Boehner said in a statement after the meeting.
.
• 
• 
• 
• 
Comments
Republicans, please explain to me how there could be this housing crisis? The trillions of dollars in tax cuts the Republicans gave to the richest 1% were supposed to trickle down to the middle class and keep them prosperous. If all of this money trickled down, why can't people afford to pay their mortgages just because the rates went up a little?
Posted by: Paul | May 7, 2008 12:05 PM
Paul, please try to ask something a little more difficult to answer next time.
Simply put, there is a housing crisis because back in the late 90s, the Fed was told to relax lending standards - so per the Democratic Admin at the time, "everyone could afford a house". From this we saw such gems as "no money down" or "interest only" loans. Combined with low rates, the "me" generation decided to refinance and take out cash (gotta have that spiffy new SUV) or buy that bigger house. This prompted a run, or bubble, in housing prices. Not sure where you have been Paul, but the real estate bubble has been well noted for years now.
As the Fed raised rates to stem inflation (a normal action as low rates and cheap money fuel inflation), people started to default on their mortgages because they went from a 4% ARM to 6%, and higher. As the mortgage industry started to burst, it had the obvious effect of supply of buyers on the market for homes. This is very apparent in a row-home development by me. 2 years ago they were selling for $650,000. Today, you can get the same model, across the street, for $600,000.
Another interesting example/fact. Around 2003, there was a study with the states with the highest number of no-interest mortgages. The states were Georgia, Nevada and Colorado. A recently released study shows the states with the highest mortgage defaults to be....... Georgia, Nevada and Colorado. Hmm!?!?!?!
Bush has done a number or things wrong, but the mortgage crisis is far from his fault. Its the fault of the "me" thinking of most Americans. Now, there are also the mortgage lenders/brokers who preyed on the lower class. And they should be prosecuted.
As for your "tax cuts" for the rich, Obama is promising a $1,000 credit. Wow. Because, after 2010, unless the Dems in congress act, the child credit of $1000 per dependent will go to $500 (so you will loose $500 per child in tax savings). Also, the 10% tax bracket will disappear and the 25% tax bracket will go to 28%. This will affect most families with COMBINED incomes of $70,000 to $100,000 the most (the middle class). Most should see a tax increase to $3,000 to $6,000 a year.
When that day comes, please enjoy.
Posted by: Trey | May 7, 2008 2:26 PM
Bush is a horrible President but he is 100% correct on this. Why should billions of dollars of taxpayer money used to bailout irresponsible lenders and borrowers?
Posted by: Lou | May 8, 2008 4:37 PM
Definitely voting for McCain in November.
Posted by: Eric | May 8, 2008 6:02 PM