Anchorage Daily News

Last week the U.S. House voted 266-154 for legislation to help American homeowners stay out of foreclosure. Alaska Rep. Don Young voted no. It was the wrong call.

The American Housing Rescue and Foreclosure Prevention Act is a sensible, practical and limited government intervention. It promises to restore balance to the mortgage market and will limit mischief that's driven by greed and wishful thinking among lenders and buyers.

The relief offered by the act is voluntary. No lender or borrower is forced to participate.

It offers a second chance, not a bailout. Both lender and borrower pay for that chance. Lenders and investors agree to write down loans and take a loss, but recoup most of their investment. The market adjustment more truly reflects the real value of the mortgages, stabilizing the market and encouraging more investment.

The borrower gets a fixed-rate, affordable mortgage, but pays with higher refinancing fees. When the refinanced home is resold, any profit from a sale must be shared with Uncle Sam -- in other words, with the taxpayers -- to help cover the costs of the rescue. That share is no less than 50 percent -- and 100 percent if a borrower sells within a year of refinancing.

That's a fair deal. Both lenders and borrowers made this mess. Both should pay to clean it up.

Only primary, owner-occupied residences are included. No speculators, house flippers, second or third homes.

In the House vote, party lines held -- to a point. No Democrat voted against the measure. Thirty-nine Republicans broke ranks with party and president to vote for the measure.

Rep. Young isn't taking the kind of heat that is scorching his colleagues from states where subprime mortgages and a galloping foreclosure rate have hurt families and neighborhoods. That's because Alaska didn't much indulge in the subprime circus. We're suffering tighter credit and slower housing sales than in recent years, but our market remains healthy.

Not so in much of the rest of the country.

Market purists loathe government intervention; they're wary of what they feel are bailouts of both irresponsible lenders and investors and irresponsible borrowers and homeowners.

But beware -- letting the market "correct" itself will inflict a lot of pain beyond the lenders and borrowers.

Rep. Young did support an amendment that would provide tax credits to first-time home buyers and a standard property-tax deduction to home owners who don't itemize on their tax returns. He opposed the overall measure because, he said, the vast majority of responsible homeowners shouldn't have to subsidize the rest. Investors and borrowers should take responsibility for their actions.

But under this bill, they will be held responsible. Lenders don't get all their loan money back. Homeowners pay new fees and have to give up a portion of profit when they eventually sell the house.

Jane Bryant Quinn, writing recently in Newsweek, said the measure may not work because the crisis isn't bad enough yet for lenders and investors. They're not hurting badly enough to take the government's voluntary deal. But with foreclosures ringing up at an estimated 7,000 to 8,000 per day, the incentive may be growing.

Simply put, we need lenders to be more prudent and borrowers to be wiser and more credit-worthy. But if we just let the chips fall now, we'll all pay dearly. The recession will run deeper and longer. Property values will sink and neighborhoods will suffer from having empty homes that didn't have to go into foreclosure. Better to give people, neighborhoods and our economy a fighting chance as we restore sanity to our mortgage practices.

BOTTOM LINE: Rescue for homeowners isn't a free ride, but a second chance. It makes sense.

Hold on

Palin tells DOT 'not so fast'

When it comes to the Juneau road, Gov. Sarah Palin is exercising some adult supervision over the state Department of Transportation. The agency was all geared up to bid the first five miles of the controversial project as soon as key federal permits come out later this spring.

Gov. Palin told DOT "not so fast." She doesn't want to bid phase one of the 50-mile project unless the state knows the entire project can survive the lawsuit that's pending against it.

And that's the right call. There's no point in building the first five miles if the other 45 aren't going to follow. (Actually, there's not much point in building the entire 50-mile project, since it is really just a very expensive, very long driveway to a new ferry terminal. It doesn't connect Juneau with the continental road system.)

In an e-mail, Palin told DOT the road was "not a priority for our administration," but she hasn't rejected the project altogether. She probably can't. When running for governor, she led Juneau to believe she supported the road. "It needs to continue to be allowed to progress," she said at the time, according to the Juneau Empire.

How does she square that campaign promise with her sensible call now, to hold off the phase one contract?

At the time, "there was not a pending motion in federal court for a permanent injunction against the project," spokeswoman Sharon Leighow said in an e-mail to the Daily News.

That sounds like a typical politician's dodge, but starting the first piece of the controversial Juneau road right now would be a potentially costly and wasteful mistake.

BOTTOM LINE: It's too early to start building the first five miles of the Juneau road.

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