The Senate Votes on FHA Bill - Experts Worry About Expansion In The Mortgage Market

A Recent Poll for the National Taxpayers Union Found 60 Percent of Those Surveyed Believe Taxpayers Would Be Most Negatively Affected if the Government Bails Out the Subprime Market.

Washington, D.C. – December 14, 2007

The Senate passed legislation today expanding the power of the Federal Housing Administration to help address the subprime mortgage issue. The bill would allow the FHA to lower the minimum amount necessary to get a loan and raise the limit on the mortgages the FHA can insure. But many experts are concerned that taxpayers are being put at risk.

"Everybody is trying to propose that these agencies take on more risk, that they insure bigger loans, that they accept borrowers who have put less money down," said Dr. Jacob Vigdor, Economics Professor Duke University, "All of these things are just going to shovel more risk on to more organizations that aren’t really well-prepared to handle it.”

"This poll shows that Americans are very skeptical about what government can and should do about the subprime mortgage problems," said Pete Sepp, VP Policy and Communications, National Taxpayers Union, "By a two-to-one margin, they are saying that banks and Wall Street will benefit more than homeowners if the government steps in."