Congressman Cardoza Introduces Housing Legislation

January 8, 2009 12:00:00 AM PST
A valley congressman has introduced new legislation to stop the bleeding in the nation's housing crisis.Congressman Dennis Cardoza's idea is to offer four percent, fixed rate mortgages to Americans in hopes of reducing their payments and turning the economy around.

With foreclosures up and homeowners struggling to stay afloat, Congressman Dennis Cardoza believes drastic measures are needed to stop the recession.

His solution: 4 percent, 30 fixed rate mortgages for new homebuyers and current homeowners who are paying on time, but aren't able to refinance. And at first glance, some Valley homeowners say it sounds like a good idea.

"It sounds like it, it seems like they keep trying different things but nothing's starting to work yet," said Penny Sweazy of Fresno.

"I think it would stimulate the economy I think it's a package that could do a lot of good for the nation and the local economy," said Mark Wathen of Fresno.

Ironically, these low interest loans that would help people avoid foreclosure would come from two financial giants who fell victim to the foreclosure crisis. Back in September, the government used taxpayer money to take control of Fannie Mae and Freddie Mac.

Cardoza said low interest Fannie and Freddie loans will lower the number of foreclosures and save taxpayers money. That's because the more people allowed to stay in their homes, the less money taxpayers are on the hook for when it comes to bad loans.

But Fresno economist Henry Nishimoto said there is no one quick fix and that Congress should proceed with caution. "To come up with this at this point before the initial bailout funds, the initial $350-billion dollar bailout funds have had a chance to work through the system is premature and I think it could do some serious damage to the economy."

Cardoza's Housing Opportunity and Mortgage Equity or "HOME" Act was introduced Wednesday. It's fate will be decided by his fellow lawmakers.

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