Congress About to Put FHA at Grave Financial Risk

CNN/Money reports that Federal Housing Commissioner Brian Montgomery is warning that legislation currently before Congress could put the FHA at financial risk and make the housing crisis worse:

Federal Housing Administration Commissioner Brian Montgomery told the National Press Club that Congress legislation proposing that the FHA back up to $300 billion worth of troubled mortgages—or about two million loans—would weaken the agency.

"This is a worrisome idea," Montgomery said. "FHA is designed to help stabilize the economy, operating within manageable, low-risk loans. It's not designed to become the federal lender of last resort, a mega-agency to subsidize bad loans."

Under this legislation, the U.S. taxpayer—via the FHA—would be guaranteeing the troubled mortgages on homes that continue to decline in value. Does anyone think this is a wise idea? Actually yes—the U.S. Congress.

President Bush has threatened to veto the bill. You can help encourage a veto by calling the White House at either 202-456-1414 or 202-456-1111. Just call and say you want President Bush to veto Congressman Barney Frank's "American Housing Rescue and Foreclosure Prevention Act."

In addition to calling, you can email the White House at comments@whitehouse.gov

Your hard-earned tax dollars are at stake.

From the comments:

Actually, the best way would be to HAND WRITE a letter to your Congressman venting your frustration at their inability to grasp this issue....

Warner, John- (R - VA)
225 RUSSELL SENATE OFFICE BUILDING
WASHINGTON DC 20510
(202) 224-2023

Webb, Jim- (D - VA)
144 RUSSELL SENATE OFFICE BUILDING
WASHINGTON DC 20510
(202) 224-4024

The bill has actually already passed both houses of Congress and the differences between the two versions are currently being ironed out. Then both houses of Congress will vote on the finalized version of the bill. Then it goes to the President. The quickest line of defense now is a presidential veto, so please call the White House.

If President Bush vetoes the bill as he said he would, Congress will then try to override it, so the combination of calls to the White House, calls to your congressmen, and written letters to your congressmen would all be helpful.