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Journalism of Courage
US President George W Bush on Wednesday signed a massive housing bill intended to provide mortgage relief for 4,00,000 struggling homeowners and stabilise financial markets. Bush signed the bill without any fanfare or signing ceremony, affixing his signature to the measure he once threatened to veto. He was surrounded by top administration officials, including US treasury secretary Henry Paulson and housing secretary Steve Preston.
“We look forward to put in place new authorities to improve confidence and stability in markets,” White House spokesman Tony Fratto said. He said that the Federal Housing Administration (FHA) would immediately begin to implement new policies “intended to keep more deserving American families in their homes.”
The measure, regarded as the most significant housing legislation in decades, lets homeowners who cannot afford their payments refinance into more affordable government-backed loans rather than losing their homes. It offers a temporary financial lifeline to troubled mortgage companies Fannie Mae and Freddie Mac and tightens controls over the two government-sponsored businesses.
The House passed the bill a week ago; the US Senate voted on Saturday to send it to the president. Bush didn’t like the version emerging from Congress, and initially said he would veto it, particularly over a provision containing $3.9 billion in neighborhood grants. He contended the money would benefit lenders who helped cause the mortgage meltdown, encouraging them to foreclose rather than work with borrowers.
But he withdrew that threat early last week, saying hurting homeowners could not wait — and even blaming the Democratic Congress’ delays in action for forcing an imperfect solution. Meanwhile, many Republicans, particularly those from areas hit hardest by housing woes, were eager to get behind a housing rescue as they looked ahead to tough re-election contests. Paulson’s request for the emergency power to rescue Fannie Mae and Freddie Mac helped push through the measure. So did the creation of a regulator with stronger reins on the government-sponsored companies, as Republicans have long sought.
Democrats won cherished priorities in the bargain: the aid for homeowners, a permanent affordable housing fund financed by Fannie Mae and Freddie Mac, and the neighborhood grants. The bill takes several approaches to curing the ailing housing market. It aims to spare debt-strapped homeowners, many of whom owe more their houses are worth, from foreclosure by allowing them to get more affordable mortgages backed by the FHA. The FHA could insure $300 billion in such mortgages, which would be available to homeowners who showed they could afford a new loan.
