WASHINGTON (AP) - Offering federal help for strapped mortgage holders, President Bush is proposing to aid hundreds of thousands of borrowers hard hit by the housing slump.Parts of that are okay. There should be more attention paid to lending laws and practices, but the notion that a homeowner can enter into a loan that he knows he can't repay and then be saved by the Federal government is a bad idea. When you remove personal responsibility and risk to lenders from the mortgage market, you open up the door to all kinds of future abuses which end up costing the taxpayers who have not been irresponsible billions.
The president on Friday was to talk about several initiatives and reforms to help homeowners with risky mortgages keep their homes, a senior administration official said Thursday. Bush also was to discuss efforts to prevent these kinds of problems from arising in the future.
The official said Bush will direct Treasury Secretary Henry Paulson and Housing Secretary Alphonso Jackson to work on an initiative to help troubled mortgage holders get services and products they need to keep them from defaulting on their loans. The official spoke on condition of anonymity to discuss details of the initiatives ahead of the presidential event.
Bush also planned to:
- Urge Congress to pass Federal Housing Administration overhaul legislation that would give the FHA more flexibility in assisting mortgage holders with subprime mortgages.
- Pledge to work with Congress to reform the tax code to help troubled borrowers rework their loans.
- Call for rigorously enforcing predatory lending laws and strengthening lending practices.
UPDATE: I think Scott Ott agrees with me: Bush to Aid Troubled Mortgage Holders, Vegas Losers
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