Schumer Thinking Big On Housing Crisis

Troubles in the subprime mortgage market lie at the heart of the economic slow-down that’s occupying all of Congress’ attention these days. And it looks like the subprime issue could get a legislative boost from all the stimulus talk.

Sen. Charles Schumer (D-N.Y.) indicated Wednesday that he’s thinking big on the housing crisis. Savings and Loans big.

In addition to proposals already on the table, Schumer , a member of the Senate Banking, Housing and Urban Affairs Committee, said he’s looking at “more extensive government involvement along the lines of the RTC,” an acronym for the Resolution Trust Corporation, which liquidated savings and loans assets during the 1980s S&L crisis.

But don’t look for that or any other mortgage fixes in the emerging congressional stimulus package, even though Schumer was apparently considering it.

At a hearing Wednesday, Schumer asked former Treasury Secretary Lawrence H. Summers whether Congress should try to deal specifically with the housing crisis in the stimulus legislation.

“Further action with respect to housing is a good idea,” Summers said, but if throwing it into the stimulus mix is going to complicate negotiations and slow down passage, better to leave it out.

That’s all it took to convince Schumer. At a press conference on the just an hour or so later, he said he would make housing pitches separate from the stimulus.

“We have a number of things that we want done,” Schumer said, referring to conversations with Senate Banking Chairman Chris Dodd (D-Conn.) and listing ideas they’ve talked about before such as putting more counselors on the ground and lifting lending caps for Fannie Mae and Freddie Mac. Schumer expressed support for legislation to allow bankruptcy judges to alter mortgage terms, a proposal popular with consumer groups.