From the Miami Herald on Sunday, June 1, 2008:

Here's a simple message on a complicated topic -- the housing aid package being crafted in Congress: Lawmakers should endorse the version approved by a Senate committee last month. The White House should stop dithering and give the bill its unequivocal support.

Rescuing homeowners who got in over their heads and lenders who should have known better is not everyone's idea of a good mission for the federal government. But given the depth of this crisis and its cascading effect on the rest of the economy, a government response is both proper and desperately needed.

The Senate plan, crafted by Sen. Chris Dodd, D-Conn., and Sen. Richard Shelby, R-Ala., would give cheaper, government-backed FHA mortgages to up to 500,000 strapped borrowers.

Lenders would have to refinance the loans at less than the homes' current value. They would take significant losses, but it's better than collecting zero on a failed loan. The FHA would back as much as $300 billion in new mortgages to refinance threatened loans.

Here is the best part: The cost of failed loans would be covered not by taxpayers but with fees paid by mortgage originators to the two government-sponsored companies known as Fannie Mae and Freddie Mac. Ultimately, anticipated defaults could amount to $1.7 billion over five years, according to an estimate by the Congressional Budget Office. But the bill also calls for tighter regulation of the two quasi-government agencies in order to eliminate bad loans or at least keep them to a minimum.

A similar House-passed measure is riskier because it would use money from the federal budget instead of relying on the quasi-government agencies Fannie Mae and Freddie Mac to back up the mortgage program. The Senate version is preferable. The White House should get behind it and urge Congress to pass this bill in time for the president to sign it into law by July 4.