Congress and the Mortgage Industry

      Top economic minds have been clamoring for federal action to help out the estimated 2 million people who are in danger of losing their homes.  It may take more dire circumstances to push Congress ,and President Bush to do something.  Why aren’t the candidates running for the Presidency in 2008 making more of an issue out of this?     President Bush has suggested that borrowers could refinance their mortgages with fixed rate loans under a cautious remedy proposed by Bush.  This will only apply to the 80,000 who have 3% equity in their home and can prove their original loan was being repaid until it was reset.     Congress is divided on measures that would ease mortgage problems. Proposals include federally chartered mortgage companies to help refinance delinquent mortgages held by the kind of people that Bush’s plan won’t cover.     Later this month the Federal Reserve could cut interest rates, which would lower monthly payments for those struggling to pay their adjustable rate mortgages.  The Fed has issued guidelines urging loan service companies to work with borrowers who are in danger of default.     Banks could renegotiate loans.  The problem with that is that banks often sell their home loans to investors, so the original lender no longer has a stake in the credit.     The bottom line is that if the Fed doesn’t lower interest rates, more needs to be done.*  The mortgage industry can’t rely on the President and Congress to come to any kind of agreement. And, if that ever happened , how long before that could be implemented?     The American economy, since 1995, has been driven by the housing market.  Now, more than ever, we need some leadership from within the Mortgage Industy and Congress.  Stay tuned, this story seems to rewrite itself every day.*Yesterday discussions began regarding Fannie Mae and Freddie Back freezing some forthcoming rate increases for some adjustable loans that are set to reset.  This was seen as a positive beginning but right now we’re only in the theorhetical stages, so stayed tuned to see what happens.