WASHINGTON Congress' top Democrats demanded quick action on the subprime mortgage crisis, saying President Bush has been slow to address a situation that could cost millions of people their homes.
"This is a national crisis. Too bad it's taken so long to realize that we have a crisis," Senate Majority Leader Harry Reid of Nevada said at a joint news conference with House Speaker Nancy Pelosi of California.
Pelosi, Reid and other Democrats want the president to appoint a special adviser to coordinate the federal response to the subprime mortgage crisis.
"The subprime crisis demands action, and we're working to protect families who have lost their home or are in danger of foreclosure," Pelosi said.
The Democrats are trying to pressure the White House and congressional Republicans into supporting their efforts to alleviate the mortgage mess.
Foreclosure filings in August more than doubled nationwide from the same period a year ago and jumped 36 percent from July, according to RealtyTrac Inc., based in Irvine, Calif. The filings include default notices, auction sale notices and bank repossessions.
Many of the foreclosures are caused by subprime mortgages home loans made to people with weak credit histories. Many of those adjustable rate loans start out with low interest rates, but then reset to higher rates a few years down the road, bringing monthly mortgages up to prices many homeowners cannot afford.
More than 2 million adjustable rate mortgages are scheduled to reset by the end of 2008.
Bush last month acknowledged "some unsettling times" in the country's housing and credit markets. He has proposed expanding eligibility requirements for refinancing loans guaranteed by the Federal Housing Administration under a new program to be called FHA Secure.
Democrats say that is not enough. They repeated their demands for the White House to support more government spending to help homeowners avoid foreclosure, to increase the portfolio caps for home-loan finance companies Fannie Mae and Freddie Mac, and to agree to their plans to modernize the Federal Housing Authority.
The government last month slightly increased the investment portfolio caps for Fannie Mae, but the action did not go as far as Democrats had hoped.
"We predict at least 2.2 million people will lose their homes and the response from the Bush administration has been slow and small," said Rep. Carol Maloney, D-N.Y.
When asked what Congress was doing, Rep. Barney Frank, D-Mass. and head of the House Financial Services Committee, pointed out various bills that Democrats have been trying to move in the House and Senate this year.
The House in September passed legislation allowing the FHA to back refinanced loans for tens of thousands of borrowers who are delinquent on payments because their mortgages are resetting to sharply higher rates from low initial "teaser" levels. The Senate has passed a bill that would provide $200 million to help build up the network of nonprofit groups that help borrowers facing problems with subprime mortgages.
But Frank also accused the Republicans of blocking legislative efforts in 2005 to stop the subprime mortgage crisis from occurring.
"Republican House leadership sent word to (then-House Majority Leader Tom) DeLay: 'No action,"' Frank said. "We would have acted well over a year and a half ago at least, and a lot of these loans that are now going bad would have never been made."