House committee looks at lending
Many banks are nervous about lending, making it difficult for homeowners to refinance their mortgages. A House committee is meeting today to see what can be done to keep homeowners near foreclosure in their homes. Shia Levitt reports.
Acquiring a mortgage loan (iStockPhoto.com)
More on Housing - Real Estate, America's Financial Crisis
TEXT OF STORY
STEVE CHIOTAKIS: They're talking about lending over on Capitol Hill today. The House Financial Services Committee looks at why a lot of banks are nervous about financing -- and refinancing. And what can be done to keep homeowners on the brink of foreclosure in their homes. Shia Levitt has more.
SHIA LEVITT: Lawmakers are reviewing a federal program to help struggling homeowners refinance their mortgages to be more affordable. But few lenders have chosen to participate.
JULIA GORDON: Purely voluntary measures aren't doing the job.
Julia Gordon is with the Center for Responsible Lending.
GORDON: Whatever programs we use have to require lenders to take certain steps, and/or use government money for the government to take those steps itself.
Peter Wallison is a senior fellow at the American Enterprise Institute. He says the government should buy bad mortgages at a discount and then let homeowners repay at more affordable rates.
PETER WALLISON: We are talking about $25 million subprime and alt A mortgages, over $4 trillion in unpaid principal amount, so this is an enormous problem.
Both say to solve it, people have to get out of mortgages they can't pay, into mortgages they can.
I'm Shia Levitt for Marketplace.
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From Norman Park, GA, 02/09/2009
What lenders are participating in this federal program?
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