COLUMNS

How Congress can help Americans hurt in the housing market mess
By Sen. John E. Sununu R-N.H.

America remains the economic powerhouse of the world, but such strength does not make us immune to shifts in the business cycle, including the current housing market slowdown. As many residents across New Hampshire feel the strain of a weaker economy, some are now struggling to catch up with late mortgage payments or forestall threatened foreclosures on family homes.

Congress can't pass legislation to restore home prices overnight, and taxpayers shouldn't bail out investors or speculators who made bad decisions. However, we can -- and must -- take bold steps to help credit-worthy homeowners keep their homes, and set a course to restore steady economic growth.

Bringing stability to the marketplace and ensuring subprime mortgage problems do not spread to other parts of the economy -- such as college loans, prime loan markets and the retail sector -- is in everyone's interest.

During the past six months, both the federal government and the private sector have acted to help families deal with these changes and avoid unnecessary foreclosures. For example, the Federal Housing Administration's FHASecure program (1-800-Call-FHA -- www.hud.gov/news/fhasecure.cfm) helps individuals refinance existing mortgages at lower fixed rates and lower payments. Project Lifeline also provides help for those who are over 90 days late on their mortgage payment and face the greatest risk of losing their homes.

The New Hampshire Housing Finance Authority (472-8623 or www.nhhfa.org) offers programs to support first-time homebuyers, while the New England Mortgage Relief Fund (www.mortgagerelieffund.com) offers an opportunity to refinance existing subprime mortgages. And on Capitol Hill, Congress passed the Mortgage Forgiveness Debt Relief Act, legislation that encourages homeowners and lenders to work out new payment plans, keeping families from losing their homes and protecting them from a big tax bill on any reduction in mortgage principal.

These steps are important, but much more can and should be done. First, Congress should immediately pass the Federal Housing Administration Modernization Act, which would update the FHA program and strengthen its ability to provide low-income and first-time homebuyers with mortgage options, and provide homeowners with refinancing under more affordable terms.

Second, legislation to strengthen the regulatory oversight of Fannie Mae and Freddie Mac, two housing finance giants, is long overdue. Given the turmoil in our housing markets, it is more important than ever that we act to ensure sound and secure financial markets and minimize the risks to taxpayers that could arise from weak oversight of Fannie and Freddie.

Third, Congress should pass legislation that encourages homebuyers to purchase distressed and foreclosed properties. A temporary tax credit for these homebuyers would help reduce the huge inventory of unsold homes and stabilize prices across the country.

And finally, rules should be changed to allow the New Hampshire Housing Finance Authority to issue additional bonds, increase its access to low-cost mortgage funds, and use these resources to refinance subprime mortgages.

Putting the right pieces in place is a good start, but existing programs will be only successful if homeowners know what is available. Sharing information is essential. Equally important, we must recognize that no two situations are identical; the right solution must be matched to the needs and situation of each homeowner.

On March 8, I sponsored a home mortgage workshop in Manchester to do just this. We brought together more than a dozen financial and housing organizations, each offering tools, programs and information that can make the difference for homeowners needing assistance. We received a very positive response from the counselors, loan providers, and homeowners who attended, and similar workshops will take place in Nashua this Saturday, March 29, from 9 a.m. to noon at the Nashua Radisson Hotel, 11 Tara Boulevard, and in Concord on Saturday, April 26.

Solutions are available. A great place to start today is the HOPE NOW alliance, which offers toll-free assistance (1-888-995-HOPE or www.hopenow.com) to connect homeowners with professional counselors such as NeighborWorks (www.nw.org) here in New Hampshire.

For so many, homeownership is the foundation of the American dream. By acting early and together, we can better protect this dream and keep it strong.

U.S. Sen. John Sununu is a Republican from Waterville Valley.