Published: July 17, 2008 09:58 pm      

Helping companies ‘absolutely right’

Tossing a life-saving raft out to mortgage giants Fannie Mae and Freddie Mac, struggling to stay afloat in a sea of red ink, is an idea backed by some members of West Virginia’s congressional delegation.

Congress is expected to vote soon on a proposal based on the Bush administration’s call to temporarily raise the ceiling on credit lines and allow the government to buy its stock at a time confidence in the economy appears to be waning.

Sen. Jay Rockefeller, D-W.Va., criticized President Bush over his initial “hands-off” approach to the crisis, saying it has led to “real damage to our housing markets.”

“But at this point, it was absolutely the right thing for them to step in and stand behind these companies,” he told The Register-Herald.

Within the past decade, the senator pointed out, the two lenders have invested billions that enabled tens of thousands of West Virginia families to buy houses.

“Home ownership in our state is significantly higher than the national average,” Rockefeller said.

“That’s a good thing and leads to strong communities and a better quality of life for hard-working families. We need these two mortgage giants to remain strong for West Virginia and the nation.”

Federal Reserve Chairman Ben Bernanke advised Congress in a Wednesday appearance before the House Financial Services Committee that neither lender is at risk of collapse.

Combined, the two hold or guarantee more than $5 trillion in mortgages.

In recent weeks, the House has approved a version of the housing bill and the chamber has agreed some reform oversight is needed, Rep. Shelley Moore Capito, R-W.Va., told the newspaper.

“Now we’re looking to see how those reforms can mesh with the proposal from (Treasury) Secretary (Henry) Paulson without creating an unnecessary burden for taxpayers,” she said.

With the two major lenders battling to survive, “there’s little question there’s a real issue here,” Capito said.

“Our economy depends on Fannie Mae and Freddie Mac to assist homebuyers, not only in purchasing a home, but also by providing stability in the secondary market and ensuring that there are adequate resources for home loans,” she said.

“Clearly, we must be smart in our response.”

An aide to Rep. Nick Rahall, D-W.Va., indicated the bailout has been set aside until next week, and until more details are available, the 3rd District congressman declined to comment on the matter.

There was no response from Sen. Robert C. Byrd, D-W.Va.

— E-mail:

mannix@register-herald.com