Lawmakers Suggest Washington Officials Address Housing Issues

Washington, D.C.–As the $150 billion stimulus plan hits the Senate for approval, lawmakers are suggesting housing needs more help, the Financial Times reported Monday.The home foreclosure rate has remained high, despite attempts to encourage the private sector to reduce it–prompting Senate Banking Committee Chairman Christopher Dodd to say last week that “to the extent this economic crisis has a face: it’s housing. And to the extent there’s a face on the housing crisis, it’s the foreclosure crisis.”The Hope Now Alliance, a group of mortgage lenders, servicers and counselors formed In October to help subprime homeowners refinance and avoid foreclosure, has moved too slowly, according to some Democrats. The Center for Responsible Lending said last week that Hope Now would ward off foreclosures in just 3 percent of the defaulting subprime mortgages with adjustable rates, claiming foreclosures exceeded loan modifications by 13:1. However, the Mortgage Bankers’ Association said that figures from rating agency Moody’s proved more than 50 percent of subprime adjustable rate mortgages scheduled to reset in the first eight months of 2007 had been refinanced or paid off.Several lawmakers are concerned that an increase in foreclosures could prompt a larger economic decline, decreasing the home value of properties near foreclosed homes and hurting tax revenues, according to the Times.Last week, chairwoman of the Federal Deposit Insurance Corporation Sheila Bair told a Senate banking committee that foreclosures likely would rise and that mortgage servicers and lenders must “aggressively pick up the pace on subprime loan modifications” soon or “invite regulatory and legislative action.”