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PASSAGE OF EMERGENCY HOUSING BILL CRUCIAL TO SHORING UP MORTGAGE CRISIS
“The emergency facing our nation’s economy warrants extraordinary action to protect the public’s interest” says Walz
For Immediate Release
July 22, 2008
Contact: Meredith Salsbery
507-388-2149
WASHINGTON D.C. — Yesterday, Congressman Tim Walz voted for the most comprehensive housing bill yet that will assist families facing foreclosure keep their homes and help the economic recovery of local communities harmed by abandoned houses caught up in foreclosure. The bill passed the House last night with a vote of 272-152 and is now working its way through the Senate.
To restore market confidence, the bill gives the U.S. Treasury Department emergency and temporary financing authority for Fannie Mae and Freddie Mac, which hold or back half of the national mortgage debt and are about the only source of money still available for mortgage lenders. Most Americans’ primary investment is their home—and home values have plummeted by a record 15% in the last year. Ending the foreclosure crisis is vital to the American economic recovery.
“The American people know things are very serious when a free marketeer like U.S. Treasury Secretary Henry Paulson, a man who has long been a proponent of limited government, comes to Congress and the American people asking for immediate authority to step in and help address the deepening housing and financial problems strangling our economy,” said Walz. “From home foreclosures to sky rocketing gas prices, hard-working American families are being squeezed. This emergency housing bill can help turn things around.”
Freddie Mac and Fannie Mae hold guarantees for roughly $5 trillion in U.S. mortgage debt. To stabilize the housing finance market and make sure that affordable home loans continue to be available, the measure included in H.R. 3221 gives the Secretary of the Treasury stand-by authority in the unlikely case that the Government Sponsored Enterprises (Fannie and Freddie as well as Federal Home Loan Banks) require temporary federal financial intervention.
The Congressional Budget Office reports “There is a significant chance -- probably better than 50 percent -- that the proposed new Treasury authority would not be used before it expired at the end of December 2009.”
“Let’s hope the Treasury Department doesn’t need to use this new authority,” said Walz. “But if conditions worsen the Treasury Secretary will have new financial tools to act in the public’s interest.”
Additional measures in the bill would shore up the housing market and ensure the availability of affordable home loans, by putting in place a tough, independent new regulator in charge of the housing Government Sponsored Enterprises, which are vital to both the financial markets and American homeowners.
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