What have you always wondered about the economy? Tell Us

Buybacks to regulate mortgages

John Dimsdale Mar 31, 2008


Scott Jagow: Congress has been on spring break, but gets back to work today. Regulating the mortgage industry is another top priority. John Dimsdale has more on that.

John Dimsdale: One congressional proposal would re-create the government-run Homeowners Loan Corporation from the 1930’s. The idea is to have a government agency buy and service troubled mortgages temporarily.

One co-sponsor, Illinois Republican Mark Kirk, says there’s an initial cost. But in the 1930’s, the corporation ultimately made money.

Mark Kirk: It earned a profit by providing a steady source of finance. And then when the economy improved, it sold house and mortgages in a rising market, recouping its losses without seeing 1.8 million Americans thrown out of their homes.

Other lawmakers propose forcing mortgage lenders to refinance bad loans with more affordable interest rates, backed by federal insurance to guarantee the new loans.

There will be several hearings to consider housing remedies later this week, with Fed Chairman Ben Bernanke offering his input before the Joint Economic Committee on Wednesday.

In Washington, I’m John Dimsdale for Marketplace.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.