Editorial: Housing bill stabilizes mortgage business

When Congress and the president both see a need to get something done, it sure doesn’t take long for the legislation to move forward.

That’s the case with the housing bill that President Bush signed last week.

After the House of Representatives and the Senate voted to approve the plan, the president, who at one time stood against part of the provisions, put the proposal into action.

The reason: All saw the need to help stabilize the financial markets. That, especially in an election year, proved to be a motivator to lawmakers on both sides of the aisle.

The bill will help provide 400,000 homeowners struggling with their mortgage payments a chance to go and refinance to a more affordable government-backed loan. This is an effort to help them keep their homes.

The bill also could help mortgage companies Fannie Mae and Freddie Mac, which have been struggling in their own right, and give them a possible temporary line to money. This move, in Treasury Secretary Henry Paulson’s eyes, is an effort to help stabilize the economy by showing these two giant mortgage lenders have the backing to overcome the tough times if needed.

The bill also contained $3.9 billion in neighborhood grants.

All of this is an effort to shore up the economy — at least in the short term.

These moves were necessary, given that few people wanted to see thousands lose their homes.

But what can be done to help shore up the home market five to 10 years from now? And should government have a role?

Stricter loan rules might be one consideration for the government to look at, though it also might limit who may qualify. There would need to be more research completed to determine what those impacts just might be.

Education of the public and of those who are seeking mortgages is critical to stabilizing the long-term outlook. The lessons of this economic downturn should be readily available, and it should be used to build a homeowner program that helps potential buyers learn about loans and dealing with credit and debt. This, we believe, could help Americans put into perspective the type of loans they are getting and the costs they will face.

The government, possibly though the Department of Housing, could put a public education program forward. We’ve seen public education programs for anti-drug messages and other social programs. It would seem that a financial education program, which could be promoted through the media, would be a step to protect the long-term future of not only our nation’s economy, but also the individual citizen who seeks the American dream of owning a home or property.

This editorial appeared in the July 31 Sierra Vista Herald, a sister newspaper of the Green Valley News with Wick Communications Co. It reflects the opinion of this newspaper.