Housing Bill

The House of Representatives just passed a Housing Bill which aids mortgage finance companies, helps homeowners avoid foreclosure, and creates a new affordable-housing trust fund that will aid Americans who cannot afford to buy homes, in addition to providing tax incentives and raising the national debt limit.




The biggest question raised by the Bill, as was reported in the NY Times, is whether it “will be sufficient to slow the downward spiral of home prices and help the economy recover from what many experts now expect to be a prolonged slowdown.”

Although President Bush originally opposed the Bill, regarding one of the provisions to be a bailout, he was advised to support it by the Treasury secretary, Henry Paulson Jr., who insisted that the Bill was necessary to help stabilize the housing and credit markets, and backed off the veto threat.

President Bush received great criticism for supporting the bill from Republican Congressionals, such as Senator Jim DeMint (R-S.C.), who claimed that the government was showing “‘gross incompetence’ with the housing bill,” while others emphasized that the disaster is now waning. Other still forecast that the bill will be able to aid significantly less than a quarter of the millions of homeowners who are likely to lose their homes within the next year, and that the proposal falls short.

As the bill may become a law by the end of the week, it will be interesting to see what further initiatives the government is taking to aid the housing market and the millions of citizens struggling.