Frank Makes Case For Housing Rescue

Congressman Barney Frank (D - Mass.), chairman of the House Financial Services Committee, makes his case for a "housing rescue" in a recent Washington Post article in which he describes his basis for supporting a housing rescue, as well as the legislative initiatives his committee is working on. He remids us, in the following excerpt, that it isn't only the homeowners facing foreclosure that are feeling the fallout of this crisis:

• The negative consequence of this cascade of foreclosures has turned out to be more damaging than predicted. Of course, individuals whose homes are foreclosed suffer the most, and in some cases it is a suffering to which their own irresponsibility contributed. If they were the only ones being hurt, the arguments for simply letting things take their course without intervention would be stronger.

• But there are concentric circles of victims. First, the people who own homes in those neighborhoods that have a high rate of foreclosures will see their property values decline, and a spread of blight will diminish the quality of their lives. Second, communities where foreclosures cluster are hit with a double whammy -- a need for more public safety and other services to deal with the foreclosed properties as well as a drop in the tax revenue that occupied homes contribute. Third, the economy as a whole weakens as the problems spread even more widely.

Congressman Frank goes on to describe the goals of the initiatives his committee is working on:

• Taken together, [the] initiatives will help meet three crucial objectives. First, they will allow millions of families to avoid the disaster of losing their homes. Second, they will help hard-pressed local jurisdictions avoid the cascade of deteriorating neighborhoods and abandoned homes that follow in the wake of large-scale foreclosures. Finally, they will help stem the steep and destabilizing decline in house prices that led to and is intensifying the financial crisis.

For the story, see The Case for a Housing Rescue.