Dems Pass Mortgage-Aid Bill, But Bush Threatens Veto
BY JOHN TOSCANO

The Bush administration has said it opposes any taxpayer funds being used to remedy the foreclosure crisis.

Two bills to help ease the rampant housing foreclosure crisis, backed by Democrats, passed in the house last week but are facing resistance from President George W. Bush and Senate Republicans.

Congressmember Carolyn Maloney supported the measures, saying, "The housing crisis is the root cause of our weakening economy, and the critically important legislation we passed will help restore order and provide us with a road map forward."

She urged the president to "reconsider his misguided veto threat... and "work with the Congress to help keep families in their homes".

Congressmember Joseph Crowley also strongly backed the bills, saying, "This important housing legislation doesn't just help those at risk of losing their homes, but everyone living in an affected neighborhood. Foreclosed homes are a blight to a neighborhood, and this plan helps communities fight the recurrence of the broken window syndrome that we have fought so hard against for so long in Queens and The Bronx.

One bill would provide mortgage refinancing assistance, which would help prevent families from losing their homes. The bill also expands programs run by the Federal Housing Administration (FHA) that allow borrowers threatened with foreclosure to refinance into lower-cost, government-insured mortgages.

The measure also allows coops to be included for assistance for the first time and preserves affordable FHA-insured, foreclosed multi-family projects and includes a Maloney amendment to provide higher loan limits on homes that include a licensed childcare facility.

Both lawmakers maintained that the bill is not a bailout. They pointed out that it requires both homeowners and lenders to take responsibility. In order to qualify for refinancing and a new government backed mortgage, lenders and mortgage investors would be required to take a loss and borrowers would have to share any profit from the resale of a refinanced home with the government. The new plan is also only open to owner-occupied homes; speculators, investors and vacation/second homeowners are not eligible.

The second bill would provide $15 billion in loans and grants to states to acquire vacant, foreclosed homes and allow local communities to rehabilitate foreclosed properties, which currently drive down surrounding home values, and place these homes back on the market.

The Bush administration has said it opposes any taxpayer funds being used to remedy the foreclosure crisis. The Congressional Budget office estimates that the bill passed by the house could refinance about 500,000 homes over the next five years at a cost to taxpayers of about $2.7 billion.

In the Senate, the Housepassed bill faces opposition from senators whose states are not experiencing many foreclosures.

The president said he would veto the bills because the war is burdensome. In a statement of administration policy, the White House said, the measure would force the Federal Housing Administration and taxpayers to take on excessive risk, and jeopardize the FHA's financial solvency."

But Maloney (D- Queens/ Manhattan) said, "Thousands of New Yorkers are on the brink of losing their homes and becoming the next victims of the housing crisis." She also said, "We need sound public policy that will allow struggling homeowners to refinance sky-high subprime loans into mortgages they can afford. Now that we've helped Wall Street, it's time to help Main Street."

Crowley said the national housing crisis was affecting the entire country. "[Queens] communities like Jackson Heights, Sunnyside, East Elmhurst, and Corona suffering the highest rates [of foreclosure] in my district," he added.