Over the last several months, consumer spending and consumer confidence have been depressed by the housing crisis.  Indeed, the economic woes that began with a sub-prime mortgage crisis and housing slump have oozed into other areas of our nation’s vast economy. 
While borrowers in our country must certainly bear a great deal of responsibility when it comes to financial planning, the government can and must carefully examine the impact of soaring mortgage foreclosures on the whole U.S. economy and provide real solutions for the American people.
Last week, the House passed the American Housing Rescue and Foreclosure Prevention Act of 2008 and the Neighborhood Stabilization Act of 2008. I was pleased to support this comprehensive, bipartisan legislation because it is designed to reduce foreclosures, to help families avoid foreclosure in the future, and to alleviate the negative impacts of foreclosures on property values and the national economy.
The American Housing Rescue and Foreclosure Prevention Act of 2008 would provide mortgage refinancing assistance, which would help families who are losing their homes and help stabilize the housing market. The legislation would also expand Federal Housing Administration (FHA) programs to allow borrowers on the brink of losing their homes to refinance into lower-cost, government-insured mortgages they can afford to repay.
While some have criticized this initiative as a government bailout of those who have made poor financial choices, in my view, it represents an innovative, market-driven way to shore up the housing market and the overall economy. This approach would force qualified lenders and homeowners to take responsibility by requiring investors to take a loss and borrowers to share any profits from the resale of a home with the government.
Important to veterans, this legislation would increase the Veterans’ Administration Home Loan limit for high-cost housing areas, providing veterans with more homeownership opportunities. It would also help returning soldiers avoid foreclosure by extending the time a lender must wait before starting the foreclosure process. Currently, lenders could begin foreclosing three months after a soldier returns from service; under this legislation, however, lenders would be required to delay the process for one year.                    
The House also passed the Neighborhood Stabilization Act of 2008, which would provide $15 billion in loans and grants to states to acquire and rehabilitate foreclosed homes standing empty.  The loan and grant programs would be operated by the Department of Housing and Urban Development (HUD).
Everyone pays when homes are foreclosed with declines in home values and loss of state and city revenue. I am hopeful that the Senate will act quickly on this well written legislation and that it will be signed into law by the President.