PRESIDENT BUSH DELIVERS REMARKS ON MORTGAGES

These measures will help many struggling homeowners. And the United States Congress has the potential to help even more. Yet in three months since I made my proposals, the Congress has not sent me a single bill to help homeowners.

If members are serious about responding to the challenges in the housing market, they can start with the following steps: First, Congress needs to pass legislation to modernize the FHA.

In April 2006, I sent Congress an FHA modernization bill. This bill would increase access to FHA-insured loans by lowering downpayment requirements, allowing the FHA to ensure bigger mortgages in high-cost states and expand the FHA's authority to price insurance fairly with risk-based premiums.

BUSH: The bill could allow the FHA to reach an additional 250 thousand families who could not otherwise qualify for prime-rate financing.

Last year, the House passed the bill with more than 400 votes, and this year the House passed it again. Yet the Senate has not acted. The liquidity and stability that FHA provide the market are needed more than ever, and I urge the United States Senate to move as quickly as possible on this important piece of legislation.

Second, Congress needs to temporarily reform the tax code to help homeowners refinance during this time of housing market stress. Under current law, if the value of your house declines and your bank forgives a portion of your mortgage, the tax code treats the amount forgiven as taxable income.

When you're worried about making your payments, higher taxes are the last thing you need.

The House agrees and recently passed this relief with bipartisan support. The Senate has not responded. Simple reform could help many American homeowners in a hour of need, and the Senate should pass it as soon as possible.

Changing the tax code can also help state and local governments do their part to help homeowners. Under current law, cities and states can issue tax exempt bonds to finance new mortgages for first- time homebuyers.

My administration has proposed allowing cities and states to issue these tax-exempt mortgage bonds for an additional purpose: to refinance existing loans.

BUSH: This temporary measure would make it easier for state housing authorities to help troubled borrowers, and Congress should approve this quickly.

Third, Congress needs to pass money to support mortgage counseling. Nonprofit groups like Neighbor Works provides essential services by helping homeowners find affordable mortgage solutions and prevent foreclosures.

My budget requests nearly $120 million for Neighbor Works and another $50 million for HUD's mortgage counseling programs. Congress has had these requests since February, yet has not sent me a bill and they need to get the funding to my desk.

Fourth, Congress needs to pass legislation to reform government- sponsored enterprises like Freddie Mac and Fannie Mae. These institutions provide liquidity in the mortgage market that benefits millions of homeowners. And it is vital they operate safely and operate soundly.

So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs, and ensures they focus on their important housing mission.

The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted, and the United States Senate needs to pass this legislation soon.

The holidays are fast approaching and, unfortunately, this will be a time of anxiety for Americans worried about their mortgages and their homes. There's no perfect solution. But the homeowners deserve our help. And the steps I've outlined today are a sensible response to a serious challenge.

I call on Congress to move forward quickly and join with me in delivering relief to homeowners in need so we can keep our economy healthy and the American dream alive.

God bless.

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Dec 06, 2007 13:52 ET .EOF

Source: CQ Transcriptions

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