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STEVE INSKEEP, host:

It's MORNING EDITION from NPR News. I'm Steve Inskeep.

RENEE MONTAGNE, host:

And I'm Renee Montagne.

Here's the kind of number that gets the attention of elected officials: two million. That's the estimate of how many struggling homeowners could end up in foreclosure this year if nothing is done. Now both Congress and the White House say they're coming to the rescue.

On Capitol Hill today, there are more hearings on several bills in the works, and the White House yesterday announced the expansion of a Federal Housing Administration program it claims it will help half a million homeowners by the end of the year. To get the details, we turn to NPR's Congressional correspondent, Brian Naylor, and our economics correspondent, John Ydstie. Morning to both of you.

BRIAN NAYLOR: Good morning, Renee.

JOHN YDSTIE: Good morning, Renee.

MONTAGNE: John, let's start with you and with the White House announcement. Exactly what's going on there?

YDSTIE: Well, what the White House is doing is easing the eligibility requirements for a program called FHA Secure. And the administration says this will help 100,000 additional homeowners with subprime mortgages refinance into lower fixed-rate FHA-insured mortgages.

Under the new rules that were announced yesterday, homeowners who have missed as many three payments in the past 12 months - these are people who were previously deemed not creditworthy enough - they would qualify for an FHA-insured loan.

They'd have to get a new appraisal on their home, and it's possible, given the drop in home prices that they'd owe more on their homes than the homes are worth. So the administration is urging lenders to voluntarily forgive enough of the loans so the borrowers could get this FHA-insured mortgage. Incentive for lenders is that it would likely cost them less to do that than foreclosing on the loans.

Now, Congressional Democrats say it's a step in the right direction, but still not enough to address this crisis.

MONTAGNE: Okay. Well, Brian, let's talk about what Congress is offering. There are quite a few different bills being developed in both the Senate and the House.

NAYLOR: Right. The Senate is likely to approve later this morning a bill that gives big tax breaks to homebuilders and tax credits for people and to state housing agencies to buy foreclosed homes. There's also money for mortgage counseling, a few other provisions.

But the House takes a much different approach. It would provide more money for the Federal Housing Administration, the FHA, to allow homeowners with subprime loans to refinance those loans to more secure fixed-rate loans. It's sort of similar to what the administration is proposing, but on a much broader scale.

And while that plan is aimed at letting homeowners keep their homes, there's another House proposal that was approved yesterday by the House Ways and Means Committee, and that's aimed at spurring the housing industry. It would give tax credits to first-time homebuyers.

MONTAGNE: Well, the prospects for some of these Congressional bills look good. Give us a rundown of how that looks.

NAYLOR: Well, here's the thing: The House doesn't like the Senate bill. Speaker Nancy Pelosi said, you know, there's not enough help here for homeowners. And so they're likely to insist on their approach. I think what's clear is that, you know, there's going to be a lot of wheeling and dealing between the House and Senate in coming weeks, between Republicans and Democrats.

And it's going to take some work, I think, to weave together a package from all these different strands that can win the support of both parties in the House and in the Senate.

MONTAGNE: And, John, back to you. What about the administration? How does it view these Congressional bills?

YDSTIE: Well, the administration doesn't like the Senate bill, either. It doesn't help homeowners enough, it says, and the president actually says it would do more harm than good. As for the House bill being developed by Congressman Barney Frank, the administration is very worried that it's so broad that it would put taxpayer money at risk. It could end up helping speculators and people who've been irresponsible, and they don't want that.

You also hear Republicans in Congress saying let the market work. If we interfere too much in the housing market with these plans, it'll take longer to adjust to levels where home prices are affordable and buyers will move back into the market.

MONTAGNE: So still a lot of disagreement, although homeowners who are struggling would probably say they need help now. What's likely to happen?

NAYLOR: Well, I guess we go to a watch and see. As John said, there's a lot of skepticism, I think, on the part of Republicans as to how much help is actually needed. I was listening to the hearing yesterday in the House that a number of folks had, you know, 90 percent of mortgage holders aren't keeping their -making their payments on time, so why should we bail them out?

But there's also a lot of sentiment that, you know, the Congress and the federal government is riding to the rescue of these big investment banks like Bear Stearns on Wall Street, and, you know, what are you doing for the little guy? A number of senators came back after their spring break and said that that's what they heard from constituents.

And so I think both parties - see, this is a potent political issue in the fall, and they want to make sure they're on the right side of it.

MONTAGNE: Thank you both.

NAYLOR: Thanks, Renee.

YDSTIE: You're welcome.

MONTAGNE: NPR's Brian Naylor and John Ydstie.

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