Congress set to pass housing bills; Mack among those voting against foreclosure rescue
By MATT BLUMENFELD, “mailto:firstname.lastname@example.org”>email@example.com
Despite the threat of a presidential veto, members of the House of Representatives and the Senate are nearing deals to pass a pair of bills driven by the record number of foreclosures.
The legislation is geared towards helping homeowners who have been hit hard by the credit crunch and facing foreclosure as well as assisting local governments in their efforts to keep neighborhoods that are laden with vacant foreclosed homes in good shape.
The Neighborhood Stabilization Act and the American Housing Rescue and Foreclosure Prevention Act were passed through the House of Representatives last week, and ranking senators on the Banking Committee have been working round the clock to hammer out a deal that could use up to $300 billion in federal taxpayer dollars to back about a half-million mortgages
The House bills passed on near party line votes with less than a half dozen GOP defectors voting in favor of the Stabilization Act, which would give states and municipalities about $15 billion to purchase and rehabilitate foreclosed homes.
About a dozen more Republicans, mainly from states like Florida which have been hit hard by foreclosures, joined with Democrats to support the foreclosure rescue bill.
Democrats, who hold a majority in both chambers, have argued that government funds are needed assist homeowners who were steered into loans that could not afford to pay off. But Republicans oppose the use of federal dollars, saying that would put the burden on homeowners who are keeping up with mortgage payments as well as other taxpayers to bail out reckless investors and lenders.
With the Cape Coral-Fort Myers metropolitan area holding one of the highest rates in the nation, Republican Congressman Connie Mack, FL-14, is sticking to his guns by voting “no” on both bills.
“There is no doubt that the foreclosure crisis has put a strain on American families and our economy, and action needs to be taken,” Mack said in a statement Wednesday. “But punishing taxpayers who have acted responsibly and paid their mortgages on time by forcing them to bail out borrowers who made risky decisions is not the right solution to this problem.“
Cape Coral Realtor Gloria Tate said that federal funds dedicated to purchasing foreclosed homes and rehabbing them could have a great impact on localities.
“If they could buy out the foreclosures and repair them, it would repair the community,” she said, adding that she understands Mack’s reasoning in voting against the $300 billion rescue bill.
“I’m just not sure that’s the right thing for the government to do; to bail people out.“
As the private marketplace was the source of the credit crunch and foreclosure crisis, Mack believes that the forces at work in free enterprise are best suited to resolve the situation.
“I believe that we need to let the free market work — the recent cut in federal interest rates, for example, will create a window of opportunity for lenders and borrowers to refinance responsibly,” he said.
Mack did call on Congress to look into and put a stop to any “predatory practices” committed by lenders so as to protect homeowners and future buyers.
Tate argued that the federal government needs to focus on banking regulations and freeing up credit so that banks and other lenders are willing to work with people who are facing foreclosure and not simply take the property, which they usually are unable to sell.
“There are so many people that want to refinance and the lenders are yet to come around to offering terms that people can work with,” she said. “People are willing to make payments, they just can’t make outrageous payments.”
Both Democratic and Republican ranking members on the Banking Committee pledged Friday to continue to work out their differences and finish off a deal on the Senate’s version of the foreclosure bill next week, but with President Bush’s veto threat, the rescue effort’s future is in serious question.