First District Congressman Travis Childers has a background in real estate, so it would make sense that he has a high interest in a flourishing housing market.
That was one of the reasons he voted recently to pass House Resolution 3221. The bill designed to ease the subprime mortgage mess cleared Congress July 24 and was signed by President Bush July 30.
The bill clears the way for the Federal Housing Administration to guarantee $300 billion in new, 30-year fixed rate mortgages for subprime borrowers, or loan applicants with less than prime credit, if lenders write-down principal loan balances up to 90% of the appraised value of the home.
But the major selling point of the bill was the effort to prop up Fannie Mae and Freddie Mac, government-backed mortgage brokers that own more than half of the U.S.’s $12-trillion mortgage market.
“Stabilizing the housing economy is fundamental to America’s economic recovery,” Childers said in a conference call with media and financial industry folks.
Official called the Housing and Economic Recovery Act of 2008, the vote to pass HR 3221 was one of the last handful of votes Congress cast before it recessed for five weeks.
Childers said he will spend all of that time in the First District, most likely campaigning to keep the post he has held since June when he defeated Republican Southaven Mayor Greg Davis in a special election.
The First District’s congressional seat opened when Roger Wicker was appointed to fill retired Sen. Trent Lott’s post.
Childers and Davis will again face off in the general election in November to see who fills the seat for a full term.
‘Legislation is rarely perfect’
Although most of the language in HR 3221 garnered Childers’ favor, he admitted that some of its clauses were less than satisfactory.
For one, it increased the debt the federal government can hold. “I was not happy about that,” Childers said, adding that he had been assured by officials with the General Accounting Office before he cast his vote that the debt limit would not be maxed out.
“Legislation is rarely perfect,” he said.
If the bill had failed, “it is probably that the housing market would have collapsed,” he said. “I just felt this was necessary. It will ensure the availability of home loans.”
Another of the bill’s provisions allows $4 billion for states and cities to purchase and refurbish foreclosed properties.
The subprime mortgage crisis hit late last summer, the result of too many mortgage lenders approving loans for borrowers with less then prime credit, borrowers who in turn could not make their mortgage payments and whose homes eventually were foreclosed. In areas such as Nevada, Atlanta, Florida and Southern California and Arizona, entire neighborhoods have dried up as home owners abandoned their properties as foreclosure set in.
“We’re fortunate that we’re not seeing that in Mississippi,” Childers said. “Some of the other members here are.”
Childers called HR 3221 a small step on the path to recovery, yet admitted much remains left undone.
“There’s still a lot of work to do to get this economy back on track.”
Contact MBJ staff writer Clay Chandler at clay.chandler@ msbusiness.com .
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