(If you look close you can see the light at the end of the tunnel being worked on..)
Last week, the House, including a fifth of Republican members, passed a bill that would allow some homeowners to refinance loans through the Federal Housing Administration if their lenders agreed to take 85 percent of the amount borrowed. President Bush promised to veto the bill.
Here's how the political team at Goldman Sachs sizes things up:
The House passed legislation that aims to refinance troubled mortgages and increase demand among first-time homebuyers. The President has threatened a veto. Nevertheless, federal intervention still appears likely. Although some recent data have exceeded low expectations, housing continues to worsen and consumer sentiment is poor. Politicians have taken notice. Most importantly, the policy differences aren't as large as rhetoric implies. Enactment of these proposals could marginally soften the decline in home prices, by reducing the number of foreclosures and increasing demand among first-time homebuyers. It could also reduce the downside risk to mortgage-related losses, but at a potential cost to taxpayers.
The House passed legislation that aims to refinance troubled mortgages and increase demand among first-time homebuyers. The President has threatened a veto. Nevertheless, federal intervention still appears likely. Although some recent data have exceeded low expectations, housing continues to worsen and consumer sentiment is poor. Politicians have taken notice. Most importantly, the policy differences aren't as large as rhetoric implies. Enactment of these proposals could marginally soften the decline in home prices, by reducing the number of foreclosures and increasing demand among first-time homebuyers. It could also reduce the downside risk to mortgage-related losses, but at a potential cost to taxpayers.
(And)
Last Thursday the House approved H.R. 3221 by a vote of 266 to 154, more than a dozen “yes” votes short of the two-thirds needed to override a veto. This is important because President Bush threatened to veto the bill last week.
