Congressman Lincoln Davis Votes for Housing Bill as Economy and Working Families StruggleJuly 24, 2008

WASHINGTON, D.C. After months of negotiations between the White House, Senate and House, an agreement was reached on a comprehensive housing package aimed at helping families keep their homes and restoring market confidence by opening a line of credit to mortgage giants Fannie Mae and Freddie Mac. Both of which are central to the housing market. The House passed the American Housing Rescue and Foreclosure Prevention Act of 2008 by a vote of 272 to152. It has been reported that the Senate will pass the measure in the coming week and the President will sign it into law.

"The housing crisis is already having a major effect on our economy. If action is not taken now to correct it, I am afraid it will worsen exponentially, cost even more later, and continue bleeding into other areas of our economy," said Congressman Lincoln Davis. "Stabilizing the housing market and making systemic reforms to the lending industry, in order to avoid a similar situation in the future, is vital to our long-term health."

The centerpiece of the bill will expand a government-backed voluntary refinancing program, which would require lenders and borrowers to make certain compromises to be eligible. First, lenders and mortgage investors will be required to take a loss, and borrowers must share any profit from the resale of a refinanced home with the government. Additionally, since this bill is tailored to keep families in their homes, the program is open only to owner-occupied homes. Speculators, investors and vacation/second-home owners are not eligible.

The measure also gives the Treasury Department stand-by authority to grant Fannie Mae and Freddie Mac access to capital on a temporary basis. This authority aims to lessen greater future government intervention. Fannie and Freddie are the largest sources of mortgage finance in the United States and a death blow to both would wreak massive havoc on our economy.