Lawmakers have lots of ideas and plans as well as hearings to share their concerns and assess blame but there's no consensus on how to stop the foreclosures. The only thing everyone has agreed on is that something must be done.
"We may have as many as 1 million to 3 million people who could lose their homes, not because they lost their jobs, not because the economy collapsed, but because they got bad deals on mortgages," said Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking, Housing and Urban Affairs Committee.
House and Senate lawmakers are working on different plans to help Americans out of the mortgage crisis, none of which seems ready for a prime-time signing by President Bush. Dodd ac- knowledged as much last week as he urged the White House to take action, despite all the mortgage-related legislation his committee has planned for the fall.
"Those matters will take a little more time," Dodd said.
Time may be running out. Financial markets in the United States and around the globe have been shaken by fears about spreading credit problems that started with home mortgages. It began with rising defaults in subprime mortgages -- home loans made to people with weak credit histories.
The rising delinquencies have jolted global credit markets because big hedge funds and other investors poured lots of money into risky subprime mortgages because of their higher returns and now face the prospect that they will not be repaid.
The House and Senate are working on different tracks but the plan furthest down the road is in the Senate, where senators will vote in September on the Transportation-Housing and Urban Development departments spending bill. Inside that bill is $100 million earmarked for nonprofit housing groups to help homeowners in refinancing.
Many mortgages are not held at banks, so people don't know where to go when they start getting in trouble, senators said.
"First and foremost, we need people on the ground to help innocent mortgagors, innocent homeowners, refinance when they're on the edge of foreclosure and yet they have the wherewithal for refinancing," said Sen. Charles Schumer, D-N.Y., who sits on the Senate Banking Committee. "Somebody's got to fill that void."
While the Senate is working on that, Rep. Barney Frank, chairman of the House Financial Services Committee, will hold a Sept. 5 inquiry on credit ratings agencies like Standard & Poor's Corp., Moody's Investors Service Inc. and Fitch Ratings. Such rating agencies have been criticized for not properly evaluating the risks of bonds backed by mortgages given to borrowers with weak credit.
President Bush, meanwhile, urged Congress on Friday to concentrate on reforming the Federal Housing Administration, a agency created during the Depression to help low- and moderate-income Americans afford homes.
The House passed a bill last year that would modernize the FHA, but a companion bill has yet to make it through the Senate.
