The House Works On Building A Bill To Resolve The Housing Crisis
Wednesday, May 07, 2008SUSIE GHARIB: Another sign today of continued weakness in the housing market as fewer Americans signed contracts to buy previously owned homes. The National Association of Realtors says pending sales of existing homes in March fell one percent from February. That's a new low and 20 percent below year ago levels. But the realtors predicted existing home sales will increase in the second half of the year. That's because larger home loans backed by the Federal Housing Administration should become more available.
PAUL KANGAS: That drop in pending home sales came as lawmakers began debate on a series of bills aimed at shoring up the sagging housing market and preventing more foreclosures. As Stephanie Dhue reports, the proposal's already facing serious opposition.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: With the backdrop of falling home prices and rising foreclosures, lawmakers prepared to debate a massive catch-all bill of housing policy. But before the debate even started, President Bush threatened a veto.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We are committed to a good housing bill that will help folks stay in their house, as opposed to a housing bill that will reward speculators and lenders.
DHUE: The administration calls the House bill overly burdensome. Specifically, the White House objects to the Federal Housing Administration guaranteeing up to $300 billion in troubled mortgages at a cost of about $2 billion to taxpayers. The administration also denounced a provision to grant $15 billion to cities and towns to buy foreclosed homes as a bailout. The key author of the bill, House Financial Services Committee Chairman Barney Frank, defended the plan, comparing it to the Fed's effort to aid Bear Stearns. REP. BARNEY FRANK, (D) MASSACHUSETTS: $30 billion of public money made available for the counterparties of Bear Stearns, I think of necessity to avoid greater danger, but how having done that, do you denounce half that amount of money for the whole country to cities and states to buy up foreclosed property?
DHUE: Support for the bill is not clearly divided along party lines. Geography plays a key role. Republicans from areas hard hit by foreclosures support the bill. But in areas where prices didn't have huge run-ups, there is less support. State of Washington Congressman Doc Hastings says taxpayers shouldn't take the hit.
REP. DOC HASTINGS, (R) WASHINGTON: Why should American taxpayers who are making their mortgage payments each month or who are paying rent, have to come along and fund billions of dollars in giveaway grants and zero interest loans for those who speculated, gambled and lost.
DHUE: Supporters say the bill is aimed at homeowners, not speculators. Georgia Congressman David Scott says the plan will keep the housing market from spiraling downward.
REP. DAVID SCOTT, (D) GEORGIA: This is not a bailout. If anything my dear friends, this is a bail-in. This is a bail-in to save communities.
DHUE: While the bill could pass the House with a veto-proof margin, analysts say it's unlikely the measure will gain that same level of support in the Senate. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.
