Maybe it's a side effect of having to deal with rough economic times, but there's something unusual going on right now in Washington: Republicans and Democrats, Congress and the White House, seem to be actually working together to solve housing and broader economic problems -- without a lot of the usual partisan backbiting.

The cooperative effort on the multi-billion-dollar economic stimulus package -- with its tax rebates and mortgage relief for home owners sliding toward foreclosure -- is the most public example of cooperation.

But behind the scenes there have been other hints that maybe this election-bound Congress is ready to move ahead on legislation that should ultimately be positive for real estate.

For instance, though many people in the housing and mortgage industries are skeptical that Democrats and Republicans on Capitol Hill will produce a compromise legislative package to modernize the Federal Housing Administration -- raising maximum loan limits in high cost areas and streamlining the mortgage insurance programs -- there are indications that Senate and House leaders are eager to compromise and resolve differences quickly enough to put a package on President Bush's desk in the coming month.

Things could still fall apart and that timetable could slip, but bipartisan reform of FHA is now something the real estate industry can pretty much bank on.

The festering mess in the subprime market is also softening partisan opposition to broadscale improvements to the mortgage system itself. The House passed a bipartisan bill last year that would force lenders and brokers to ensure that future home buyers and borrowers are only put into loan programs that are appropriate to their financial situations, and that they understand.

The Senate Banking Committee, whose chairman, Sen. Chris Dodd, is now back on the job -- having abandoned his quest for the Democratic nomination for President -- is expected to hold hearings on a roughly similar bill in the near future. Meanwhile, Sen. Dodd is pushing for creation of a new $20 billion federal corporation to buy up defaulting loans of home owners, and replace them on a massive scale with more affordable ones.

Who knows? This Congress might actually get some of these things done!

Published: January 28, 2008

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consumer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.