03-19-08

Democrats are one step closer to allowing the government to insure hundreds of thousands of mortgages even those who have bad credit are are behind on their payments. The White House is under pressure to respond but so far has not been very willing to help the average American with their troubles stating that market conditions will sort out the housing mess. However they are starting to soften their stance.

Focus has once again turned to the FHA to help the troubled housing market and plans are underway to have FHA insure as much as 400 Billion in bad or troubled loans. Lenders would still have to take a loss on the mortgages but no where near as much of a loss if they where to take the home into foreclosure.

Republicans have not endorsed this bill yet – in order for it to pass the senate their support will be necessary.

Fannie Mae and Freddie Mac have both been authorized to lower their reserve requirement to allow for them to purchase more mortgages which should have the resulting affect of easing up on mortgage lending standards to allow more people to refinance. Which should have a softening effect on the general crisis but alone is not a solution.

This with the combined efforts of new FHA reform should do much to help the average American stay in their homes and offers a solution to the current mortgage crisis. This only issue is having the Republicans join the Democrats on this issue and voice their support. Exactly what they have not done so far however many people are hopefully that they will soon come around and accept FHA reform.

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