The House late Thursday approved a narrowly focused bill that would provide $15 billion to the states to purchase fixed-up foreclosed homes.  This mortgage bill is different from one that has been widely discussed that would enable to FHA to ensure new mortgages where the original loans were written down by lenders to reflect a substantial discount off of the original loan.

Ms. Waters’ bill would make loans and grants available to the states for the rehabilitation and eventual rental or sale of foreclosed properties. These properties, thanks to the huge inventory managed by banks and the effects of vandalism, neglect, and other forces, quickly deteriorate and, where more than one or two foreclosed houses exist in a neighborhood, can impact the entire area with a form of creeping blight and decreasing property values.