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Housing help

The Baltimore Sun

Sweeping legislation that offers help for every group battered by the mortgage foreclosure crisis will be voted on in coming days. The bill also includes something for almost everyone to hate. But Congress and President Bush should act quickly to make it law because it should give the nation some needed reassurance and the tools to help stabilize home values.

The legislation promises a steady flow of affordable money to encourage banks to offer new mortgages, which are essential to any recovery. And it provides lenders that are willing to take a loss on mortgages they hold a way to avoid financial disaster.

The bill would protect Fannie Mae and Freddie Mac, the two federally chartered private lending giants, from the threat of insolvency, a controversial pledge that could cost taxpayers $25 billion or more. About 400,000 homeowners threatened with foreclosure - a fraction of those ensnared in the financial crisis - could benefit from $300 billion provided in the legislation to fund 30-year fixed-rate mortgages.. And there is $3.9 billion in emergency aid that cities and states can use to buy vacant and foreclosed properties and stabilize hard-hit communities.

Baltimore officials hope to nab a portion of that money to help rescue neighborhoods such as Reservoir Hill, recently a budding locus of revitalization where 95 properties have fallen into foreclosure in the last two years. The provision's congressional supporters deserve praise for standing fast in the face of veto threats from President Bush, who claimed the aid would only enrich bankers and developers. He dropped his objections yesterday.

The legislation also includes provisions for much tougher regulatory oversight of Fannie Mae and Freddie Mac by the Federal Reserve, but substantial steps should be taken after the current crisis subsides to significantly reduce their influence.

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