Problems that began with the subprime mortgage crisis and housing slump have spread far beyond the housing sector, trickling into other areas of our nation’s vast economy. Now, some economists have indicated that America is facing or will soon face a recession, made likelier by the possibility of additional foreclosures in the coming year. 
While borrowers and lenders in our country must certainly bear a great deal of responsibility when it comes to the housing crisis, the government can and must carefully examine the impact of soaring foreclosures on the whole U.S. economy and provide real solutions for the American people.   
Toward that end, Democrats and Republicans in Congress and the President worked together to enact an economic stimulus package earlier this year, and the Federal Reserve has lowered interest rates. While those steps have been important to strengthening our economy, they have not been sufficient.
On July 23, 2008, the U.S. House of Representatives approved H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act of 2008, by a vote of 272 to 152. I was pleased to support this bold plan intended to shore up the housing market and the overall economy. It would do so by providing tax incentives to many first time home buyers to stimulate the real estate market, by reducing foreclosures, by strengthening communities that have been hardest hit by foreclosures, and by increasing regulatory oversight of Freddie Mae and Fannie Mac.                                    
Passage of this legislation would encourage new home sales, help many families in danger of losing their homes, and strengthen communities harmed by foreclosures. H.R. 3221 would provide a $7,500 refundable tax credit for first time home buyers whose adjusted gross income is $75,000 or less ($150,000 in the case of a joint return).  That tax credit would be phased out for those making over the prescribed income levels. 
The bill would expand Federal Housing Administration (FHA) programs to allow borrowers facing foreclosure to refinance into a lower-cost, government-insured mortgage they can afford to repay. This legislation would also help communities hardest hit by the foreclosure crisis by providing them with funds to rehabilitate foreclosed properties that are driving down home prices and reducing state and local tax revenues. 
Provisions within the bill would also strengthen regulatory oversight of Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac are important institutions that hold or guarantee nearly half of all mortgages in the U.S. Because of the size and scope of Fannie and Freddie, their stability is critical to the entire global market and to the American people. This provision would provide the Department of Treasury with temporary financing authority of Fannie and Freddie, if needed, and would expire at the end of December 2009. 
All Americans are affected by the foreclosure crisis. This comprehensive housing package represents an innovative way to stabilize our housing market and our entire economy. The Senate will likely consider H.R. 3221 in the coming days and the President has indicated he will sign the bill into law.