Millions of people to lose their homes in US. Mortgage Crunch
Pastor Dale Morgan
Millions of people to lose their homes in US. Mortgage Crunch*
10/03/2007 16:52 Source: AP ©
Congress' top Democrats demanded quick action on the subprime mortgage
crisis, otherwise millions of people can lose their homes.
"This is a national crisis. Too bad it's taken so long to realize that
we have a crisis," Senate Majority Leader Harry Reid said Wednesday at a
joint news conference with House Speaker Nancy Pelosi.
Pelosi, Reid and other Democrats want the president to appoint a special
adviser to coordinate the federal response to the subprime mortgage crisis.
"The subprime crisis demands action, and we're working to protect
families who have lost their home or are in danger of foreclosure,"
Pelosi said.
The Democrats are trying to pressure the White House and congressional
Republicans into supporting their efforts to alleviate the mortgage mess.
Foreclosure filings in August more than doubled from the same period a
year ago and jumped 36 percent from July, according to Irvine,
California-based RealtyTrac Inc. The filings include default notices,
auction sale notices and bank repossessions.
Many of the foreclosures are caused by subprime mortgages - home loans
made to people with weak credit histories. Many of those adjustable rate
loans start out with low interest rates, but then reset to higher rates
a few years down the road, bringing monthly mortgages up to prices many
homeowners cannot afford.
More than 2 million adjustable rate mortgages are scheduled to reset by
the end of 2008.
Bush last month acknowledged "some unsettling times" in the country's
housing and credit markets. He has proposed expanding eligibility
requirements for refinancing loans guaranteed by the Federal Housing
Administration under a new program to be called FHA Secure.
Democrats say that is not enough. They repeated their demands for the
White House to support more government spending to help homeowners avoid
foreclosure, to increase the portfolio caps for home-loan finance
companies Fannie Mae and Freddie Mac, and to agree to their plans to
modernize the Federal Housing Authority.
The government last month slightly increased the investment portfolio
caps for Fannie Mae, but the action did not go as far as Democrats had
hoped.
"We predict at least 2.2 million people will lose their homes and the
response from the Bush administration has been slow and small," said
Rep. Carol Maloney.
When asked what Congress was doing, Rep. Barney Frank, head of the House
Financial Services Committee, pointed out various bills that Democrats
have been trying to move in the House and Senate this year.
The House in September passed legislation allowing the FHA to back
refinanced loans for tens of thousands of borrowers who are delinquent
on payments because their mortgages are resetting to sharply higher
rates from low initial "teaser" levels. The Senate has passed a bill
that would provide $200 million (141 million EUR) to help build up the
network of nonprofit groups that help borrowers facing problems with
subprime mortgages.
But Frank also accused the Republicans of blocking legislative efforts
in 2005 to stop the subprime mortgage crisis from occurring.