Video: The Senate Votes on Bill Designed to Help Homeowners

Experts Worry About Expansion in the Mortgage Market

WASHINGTON, Dec. 14 /PRNewswire-USNewswire/ -- The Senate passed
legislation today expanding the power of the Federal Housing Administration to
help address the subprime mortgage issue. The bill would allow the FHA to
lower the minimum amount necessary to get a loan and raise the limit on the
mortgages the FHA can insure. But many experts are concerned that taxpayers
are being put at risk.
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"I don't think we should look towards the government sponsored enterprises
as a solution to this problem. The private market is actually working very
well. We see both lenders and buyers already correcting their behavior in this
market. If you come in again with the government saying we're going to relax
the standards for some of these loans, we'll implicitly subsidize these loans
through our activity in the marketplace; when you do that, you encourage some
of the speculation that got us to where we are in the first place," said Wayne
Brough, Chief Economist, FreedomWorks. "So I would say we don't look to expand
government programs, such as the government-sponsored enterprises, and let the
market do what it does best, which is allocate these resources to where they
should be."
A recent poll by a grassroots organization shows a majority of those
surveyed do not support lowering the down payment requirements.
SOURCE FreedomWorks

Adam Brandon of FreedomWorks, +1-202-942-7698, abrandon@freedomworks.org