President Bush Addresses Mortgage Problem

A press release from the White House Press Office addressed the problem of mortgages that homeowners are facing today.

Bush noted that he spoke with Housing Secretary Jackson and Treasury Secretary Paulson this week to discuss the issue. The President stated, "The fundamentals of America's economy remain strong. But the mortgage industry is going through a period of adjustment." He continued by saying, "I have made it a priority to help American homeowners navigate these financial challenges, so that as many families as possible can stay in their homes."

President Bush stated that the government is not going to "bail out" mortgage lenders due to the fact that it would more than likely only make the problem continue. He also said the government will not "bail out" those homeowners who bought a house they new they could not afford.

Instead, President Bush gave many other options he is working on to change things at a government level.

The first change he wants is to have Congress change a key part of the Federal tax code. Currently, the law states that when a mortgage company forgives any part of a mortgage for the benefit of the customer, that amount is treated as taxable income to the homeowner. President Bush stated, "When your home is
losing value and your family is under financial stress, the last thing you need is to be hit with higher taxes. So I'm working with members of both parties to pass a bill that will protect homeowners from having to pay taxes on canceled mortgage debt."

President Bush has also requested that Congress help to modernize the Federal Housing Administration. This agency, also known as the FHA, is a government agency that provides mortgage insurance to borrowers through a network of private sector lenders.

The President stated, "I've sent Congress important legislation that would help more Americans qualify for this insurance by lowering down-payment requirements, increasing loan limits, and providing more flexibility in pricing."