Rescuing homeowners

Our view : Federal help is first step toward recovery

July 29, 2008

The housing rescue act signed by President Bush yesterday won't bring an end to the national foreclosure crisis, but it does take crucial steps to help lessen its impact in Baltimore and across the nation.

Most important, the legislation protects the liquidity of Fannie Mae and Freddie Mac, the lending giants that hold or insure nearly half of America's mortgages. Nobody likes bailing out these federally chartered lenders. But Federal Reserve oversight will ensure that mortgage money will continue to flow, nationally and around the world, a vital condition for a housing recovery.

In Maryland, the new law offers relief for potentially hundreds of families in danger of losing their homes and block grants to local governments to help rescue neighborhoods ravaged by foreclosures. There is $300 billion available to help homeowners here and across the nation. But there is no guarantee that much of this money will be used. The challenge will be to persuade borrowers to seek help and to convince unhappy lenders that it will be smart to except losses now rather than face more disastrous declines later.

Counselors from groups in the Baltimore Housing Preservation Coalition have been working hard to get the word out to families in trouble.

Residents who care about the future of their neighborhoods should join the effort. The crisis is far from over, and it affects many.

Baltimore Housing Commissioner Paul T. Graziano would like to use the federal block grant money to have community groups such as the St. Ambrose Housing Aid Center purchase and remarket foreclosed properties and help restore home values in neighborhoods such as Reservoir Hill and Belair Edison, two of the hardest hit in the city.

Mr. Graziano said yesterday that he was grateful for the federal aid. He should show his appreciation by moving aggressively to win a large chunk of it so Baltimore can shore up its vulnerable neighborhoods.

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