The Housing Rescue Bill is now in the hands of the House, after the Senate passed the legislation. Supporters of the bill claim it could also help stabilize the housing market, but not everyone is behind the bill.
"This bill isn't so much of a bailout where the government throws away money so much as an intervention to fix a broken market," says UC Berkeley Real Estate Asst. Professor Thomas Davidoff.
Oakland, like much of the Bay Area and the nation, is awash in foreclosures.
At the heart of the Senate bill are billions of dollars to help an estimated 400,000 homeowners get out of shaky loans and into fixed rate mortgages, with the government backing up lenders for the amount they reduce what's owed. Eventually, the government could get paid back as the housing market rebounds.
"An equity share arrangement whereby any future appreciation that occurs between the time of consumer relief and time the property is sold gets shared by the government to compensate them for money they put in up front to reduce indebtedness the client had," says John Holmgren from the California Association of Mortgage Brokers.
"This bill is trying to stem the tide of people walking away from their homes, because when one person walks away from their homes, that depresses home values and decreases quality of neighborhood," says Davidoff.
Oakland homeowners threatened by foreclosure campaigned for the bill with local lawmakers Saturday. Led by Congresswoman Barbara Lee, these officials toured Oakland neighborhoods by bus to visit soon-to-be-foreclosed properties --- and they praised additional money in the bill that would help locally.
"That $4 billion would provide about $5.6 million for us to leverage so that we can use federal resources to begin to purchase foreclosed homes. The president is talking about vetoing it. We can't let that happen because it would help Oakland so much," says Oakland Congresswoman Barbara Lee. .
The Housing Rescue Bill is now in the hands of the House of Representatives and is expected to be on the President's desk by the end of the month.
