The mortgage relief bill that passed Congress and was endorsed by President Bush is not a windfall, it is a lifeline to help people remain in their homes.
Foreclosures on home loans could be catastrophic for the U.S. economy. Many homeowners overreached on their loans, and defaults are increasing at an alarming rate.
A measure was pushed through Congress giving strapped homeowners an opportunity to refinance through the federal government at lower interest rates.
The bill provides temporary stability for Fannie Mae and Freddie Mac, the governments primary mortgage agencies. It also enables neighborhood grants to give additional support to the troubled housing market.
The legislation is not designed to help homeowners acquire more, but salvage their loans and keep their houses.
This is not a handout, but a rescue operation that bodes well for the public and lending institutions who also overreached on approving loans.
We wonder how a system that is supposed to pair homeowners with affordable mortgages failed so many people. We note that interest rates are cyclic, and graphs charting interest rates never run in a straight line for long.
Many of the loans made in recent years were good matches between the cost of the mortgages and the financial capability of homeowners.
But changes in the job market and fluctuating interest rates conspired to push some homeowners deep into red ink.
The mortgage relief bill will not write off debts, but make them easier to repay. It also strengthens guidelines and rules for housing loans.
It's not a reward for deficient budgeting, but a way to patch a widening crack in our economic foundation.
Congress has more work to do to promote long-term stability of the market. The bill isn't perfect. But it's a good start on short-term relief of homeowners and the housing market.
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