Housing Bailout

Is it a remedy for the worst housing slump the nation has suffered in decades? Or merely a taxpayer-funded bailout that will fail to reverse the plunge in home prices, the surge in foreclosures and the grave threat that overhangs the economy? The housing act, which won final approval in Congress on Saturday and which President Bush has said he will sign, is historic in its sweep and ambition. It aims to provide relief to homeowners, incentives to buyers, guidance to lenders and oversight to vital government-sponsored entities, such as Fannie Mae and Freddie Mac. Who, really, will benefit? And for how long? Will the legislation make a real difference for those who most desperately need help? It depends on whom you ask. The act has plenty of fans. But skepticism abounds, too.

On paper, the act holds out help for thousands in need:

•Up to 400,000 homeowners at risk of losing their homes to foreclosure.

•First-time buyers who can't afford full down payments.

•States and cities that will receive money to redevelop abandoned and foreclosed homes.

•People in need of mortgage counseling.

•Fannie Mae and Freddie Mac, which own or guarantee nearly half of the nation's mortgages and which now have a rescue plan.

But is it enough? Even if 400,000 homeowners can avoid foreclosure — a figure that a few critics dispute — some estimates put the number of potential foreclosures from 2007 through 2012 at up to 6 million.

JJ Commentary: It is somewhat irksome to incur more taxpayer debt to bail out greedy developers and stupid consumers.