Bush move could aid tens of thousands

Bush move could aid tens of thousands With two million mortgages held by American homeowners who have bad credit ratings and plunging home values, many of whom are likely to lose their homes, it was time for the federal government to do something. President Bush last week announced that he is authorizing the Federal Housing Administration to make it easier for holders of subprime mortgages to refinance through it.

It is estimated that 80,000 homeowners with poor credit, escalating mortgage interest payments and houses worth less than the amount owed on them, would be able to refinance through the FHA. We applaud the White House for recognizing that the subprime mortgage implosion is doing more than just roiling world financial markets. It is also causing stress and hardship for millions of Americans.

President Bush insisted that this is not a bailout unscrupulous lenders or investors who bought the subprime mortgages, just an attempt to help people keep their homes. But some critics observe that helping subprime mortgageholders from defaulting does indeed bail out the lenders and investors who otherwise would have to take the loss. And market purists are pointing out that bailing out companies that have bad business practices only encourages them to continue bad practices.

But it could help Michigan. The Mortgage Bankers Association reported that Michigan is among the top three states for delinquencies and foreclosures. Default Research reported that foreclosures in Michigan have increased 40 percent over last year. It has been reported that some Democratic proposals in Congress will have the White House’s backing, including raising the ceiling on how much of a mortgage can be refinanced with federal insurance.

Bipartisan support also is expected on a proposal to provide tax breaks to homeowners whose mortgages have been forgiven. There now are federal taxes on the forgiven amounts. The move announced by President Bush last week won’t solve the subprime crisis. But it will mean much to tens of thousands of families who otherwise would find themselves in default.