Hope for homeowners

Housing crisis is finally getting the bipartisan attention it deserves

(Newsday) -- The government would guarantee refinanced mortgages under the plan approved last week by the Senate Banking Committee, but only on primary residences and only if the existing mortgage holder accepts 85 percent of a home's current appraised value as payment in full. The plan would help 500,000 homeowners, including many on Long Island - home to seven of the 10 ZIP codes in New York hardest hit by the foreclosure crisis. Nassau, with 24,480 subprime loans, saw a 113 percent year-to-year jump in foreclosure-related filings last month. Suffolk, with 16,500 subprime loans, had a 43 percent spike. The Senate plan is similar to a House-passed bill that would expand government mortgage insurance. But there's one key difference. The House would use $1.7 billion in tax dollars to set up the program. The Senate would get the money from a fund financed by Fannie Mae and Freddy Mac, mortgage giants created by the government but owned by stockholders. That should eliminate the chief objection of President George W. Bush and other critics who oppose a government bailout for lenders and borrowers they see as speculators. With one in 50 mortgaged homes nationwide in foreclosure, the economy isn't likely to right itself until the housing market stabilizes. And the damage won't be limited to just the people who lose their homes. Rising numbers of delinquencies, foreclosures and abandoned houses will undermine the value of neighboring homes, even those whose owners have not fallen behind on the mortgage. The Senate program is called Hope for Homeowners. That's just what families facing foreclosure need.