While Congress continues to battle over how to respond to the foreclosure crisis, the states have been at the forefront of developing policies and programs to prevent the making of more irresponsible loans and to improve residents’ ability to stay in their homes. That was the conclusion reached in a report published by the Pew Charitable Trusts’ Center on the States.

New York is just one state, but NY Attorney General Andrew Cuomo’s March 3 agreement with Fannie Mae, Freddie Mac, and the Office of Federal Housing Enterprise Oversight (OFHEO) will transform appraisal practices across the country.  The cooperation agreement requires the two government-sponsored enterprises (GSEs) to buy loans only from banks that meet new standards designed to ensure independent and reliable appraisals.

The Federal Housing Finance Board approved a resolution on March 24 authorizing the Federal Home Loan Banks to increase their purchases of agency mortgage back securities (MBS). The resolution increases the limit on Federal Home Loan Banks’ MBS investment authority from 300 percent of capital to 600 percent of capital for two years.

Two top Democrats — House Financial Services Committee Chairman Barney Frank (D-MA) and Senate Banking Committee Chairman Christopher Dodd (D-CT) jointly announced their proposals to stem the rise in mortgage foreclosures.