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Rep. Dennis Cardoza Headshot

Solution to Economy Depends on Refinanced Mortgages, HOME Act

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As recently as September, one in 10 Americans was either behind in their housing payment or in the midst of foreclosure. In the third quarter of 2008, housing prices had fallen in 41 states and by November 2008, the median home price had fallen 12 percent from the previous year. No matter how you add up the numbers, the bottom line is the same: American families are losing their homes and our economy is trapped in a downward spiral. Unfortunately, I know this problem all too well. It began in my own backyard in California's Central Valley, which has been coined "ground zero" of the housing crisis.

Enough is enough.

With such momentous problems, it is time that we create an equally bold and momentous solution. That solution is the Housing Opportunity and Mortgage Equity (HOME) Act, H.R. 230, which I introduced in the House of Representatives this week. This measure offers every credit-worthy American homeowner and homebuyer a refinanced mortgage with a 4-percent interest rate at a fixed 30-year term. The government has attempted numerous band-aid solutions, providing billions of tax dollars to various financial institutions and flawed programs. However, none of these actions have alleviated the suffering; instead the economy has worsened and more and more families are losing their homes, jobs and retirement funds. As I and many economists have said for some time now, the mortgage crisis continues to be at the heart of our economic woes. Until we address that crisis, we can only expect more economic turmoil. My proposal is simple: put homeowners and homebuyers in affordable mortgages to stabilize housing prices while stimulating the economy by putting more money in Americans' pockets.

Because the federal government is the conservator of Fannie and Freddie, we are in a unique opportunity to conduct this program. Although such a far-reaching action by the government would have been inconceivable before the burst of the housing bubble, this is now the most responsible action that Congress can take. For far too long, the American people have been eyeing Washington and wondering how the Congress will help them. The answer should be now, with the HOME Act. This crisis began with the collapse of the housing market and that is exactly where we must begin to correct our economy. The HOME Act will do just that.