Starting as a slump in home building, new home sales, and rising delinquencies on shaky mortgages has morphed into a financial crisis which just may precipitate a recession.

United State’s lawmakers are scrambling to respond in an appropriate fashion, or at least make “political hay”, often at the expense of the home-owning populace.

Washington “insiders” say that while the Federal Housing Administration guarantees mortgages for up to 100,000 homeowners, many of these homes are now worth less than they owe on their mortgages.

The United State’s Senate recently passed a package of measures including a tax credit for buyers of foreclosed properties, funds to state and local governments to buy and rehabilitate foreclosed homes, and tax breaks for home builders.

However, many experts contend that the enthusiasm in both political parties for expanding homeownership in the past helped precipitate the crisis by encouraging people to buy homes with mortgages they ultimately could not afford.

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