Can Congress help subprime now?
The House and Senate have proposals to deal with the subprime mortgage crisis when they reconvene. But Danielle Karson reports it may be too little, too late for Congress to do anything about a possible recession.
U.S. House of Representatives (Brendan Smialowski/AFP/Getty Images)
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Scott Jagow: It's fair to say that Congress rarely moves swiftly. Case in point: the housing market. Now that the problems have moved well beyond subprime, now that a recession is creeping toward inevitable, Congress might do something. The House reconvenes from winter break tomorrow. Danielle Karson has more from Washington.
Danielle Karson: The House and Senate have proposals to deal with the housing mess, but John Irons with the Economic Policy Institute says time is running out.
John Irons: The problem is that this is spilling over to the broader economy, to all kinds of home buyers, homeowners. And it's going to have a reverberating effect throughout the economy.
Irons says proposals in Congress to let bankruptcy judges change the terms of a mortgage, and to allow the Federal Housing Administration to offer refinancing deals to many more mortgage holders, is a start. But:
Irons: That's not going to impact a big swath of the population that have gotten themselves into houses and have seen the prices drop on those houses.
So what's left for Congress to do? Not much.
Irons: Put a moratorium on foreclosures to provide people with temporary assistance. Order and encourage a lot of renegotiation between borrowers and lenders to make sure that people can stay in their homes.
But with unemployment climbing to 5 percent, home foreclosures at record highs and housing prices dropping, some analysts say recession is unavoidable.
In Washington, I'm Danielle Karson for Marketplace.
