I'm still in D.C., and attended a meeting with Congressman Barney Frank (D-MA), the Chairman of the Committee on Financial Services.  His analysis of the current housing crisis was right on the mark, especially when he said that a lot of people for many years had downplayed the role of housing in the U.S. economy.  In view of the current economic crisis, that is no longer true.

He observed that excessive optimism on the part of buyers as far as how well they could provide housing for themselves has now resulted in excessive caution.  Using the analogy of the child who touches a stove and gets burned, never to touch the stove again, he pointed out that not only do buyers avoid the stove, but the refrigerator, the microwave, the sink, the dishwasher....

The FHA modernization bill that Congressman Frank is trying to get passed is the only one on the table in the House.  According to the Congressional Budget Office (CBO), it will cost $1.7 billion and save 500,000 owners in foreclosure - not all of the ones out there, but a large portion.  Frank said it would cost on average $4800 to avert each foreclosures.  Of all the bills passed in the past year to help housing (HopeNow, FHA Secure in three flavors), this one offers the most promise for helping those in distress - not only homeowners, but everyone else as well, who would benefit from a strengthened economy.

Talk with you later.