Washington – Amid new signs that the housing slump is worsening, key Senate Democrats said Wednesday that hundreds of millions of dollars of new federal aid may be needed to assist homeowners at risk of foreclosure.
The call for federal involvement from New York Democrat Charles Schumer, chairman of the Joint Economic Committee, came on the same day the National Association of Realtors forecast that the median price for existing homes will decline for the first time since 1968 as a sales slump worsens.
“We will be proposing significant amounts of dollars,” Schumer told reporters after being asked if a large federal bailout may be needed.
Across town, meanwhile, an activist nonprofit group from Boston called on Wall Street to help homeowners restructure their mortgage loans.
“We’ve heard one heartbreaking story after another of borrowers with limited incomes being sold mortgages they could not afford,” Sen. Sherrod Brown, D-Ohio, said at a briefing on Capitol Hill.
His words were backed up by the realty group’s prediction of a 0.7 percent decline to $220,300 this year in the median sales price for existing homes, down from $221,900 last year. Tighter lending standards and the continued fallout from a troubled market for loans given to people with shaky credit are to blame, the group said.
The NAR also revised downward its estimate of total sales this year of existing homes to a decline of 2.2 percent, compared with an earlier forecast of a 0.9 percent decline. New-home sales are expected to fall 14.2 percent, compared with a previous estimate of a 10.4 percent slide, the NAR said.
