Lawmakers Work on Mortgage Rescue Bill

June 25, 2008 9:38:47 AM PDT
The foreclosure crisis is still sending people packing out of their homes. Lawmakers in Washington are scrambling to put together a rescue bill.The "price reduced" signs confirm sobering numbers from the latest housing report:

Home prices in the 20 largest U.S. cities dropped more than 15% percent from last year. This is the biggest decline in 20 years and economists think it could get worse.

David Blitzer with the Case-Shiller Index said, "A lot of the factors that pushed housing prices to drop and have kept them falling are very much still in place."

Those factors include: the largest glut of unsold homes in decades, and a continuing foreclosure crisis that is pushing more homes on the market , at lower prices.

Lawmakers could vote as early as today to pass a rescue package. It would help the estimated 400,000 Americans with sub-prime loans facing foreclosure.

The senate legislation includes salvaging $300-billion-dollars in new, cheaper loans. It also offers first time homeowners an $8,000 dollar tax credit for buying a foreclosure property to live in and stricter regulation of lending giants Fannie Mae and Freddie Mac.

The president and many republicans oppose government backing of refinanced sub-prime loans. "This expansion will be accomplished by taking the worst performing & the riskiest loans made by banks, shifting 100% of the liability of foreclosure onto the American taxpayer," said Senator Mike Enzi (R) Wyoming.

The president has threatened to veto this bill that has bi-partisan support in both houses of congress. But the White House is sending hints that with some changes, the president would support this measure.


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