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Clinton seeks FHA help in housing crisis

The agency would be allowed to buy failing mortgages and help people to refinance.

Surrounded by supporters, Sen. Hillary Rodham Clinton signs autographs at Montgomery County Community College. At the rally, she evoked themes of sisterhood and motherhood.
Surrounded by supporters, Sen. Hillary Rodham Clinton signs autographs at Montgomery County Community College. At the rally, she evoked themes of sisterhood and motherhood.Read moreERIC MENCHER / Inquirer Staff Photographer

Campaigning in Philadelphia, Hillary Rodham Clinton said yesterday that the Federal Housing Administration should be permitted to buy up subprime mortgages and make them more affordable for beleaguered homeowners.

The Democratic presidential candidate offered the proposal, which would expand the FHA's authority and would require congressional approval, during a policy address at the University of Pennsylvania.

Clinton's speech was the first stop of several for her in the Philadelphia area yesterday. Her itinerary included a rally for women in Blue Bell and a conversation with the editorial boards of The Inquirer and Daily News.

In the talk at Penn, she endorsed a bill proposed by Sen. Christopher J. Dodd (D., Conn.) and Rep. Barney Frank (D., Mass.) that would authorize the FHA to act as a guarantor for at-risk mortgages in the hopes of facilitating their sale and reworking their terms.

But Clinton would go further, giving the federal agency itself the power to "purchase, restructure and resell underwater mortgages" with the goal of helping some distressed mortgage-payers stay in their homes.

Acknowledging that some might call her plan a "bailout," she dismissed such criticism as "the same kind of tired rhetoric we've been hearing for years now. . . .

"How can you tell a family about to lose their home that there's nothing we can do to help them?" she asked. "How can you tell them that if they had failed spectacularly, we would've helped them, but because they are failing quietly, desperately, we are turning our backs?"

In addition, she proposed setting up an emergency working group to investigate how best to restructure at-risk mortgages; giving mortgage services who work with families new legal protection; and setting up a $30 billion fund to help state and local governments prevent foreclosures and deal with their impact.

Her Democratic rival, Barack Obama, was in the U.S. Virgin Islands yesterday enjoying a brief respite from the campaign. Obama's campaign manager, David Plouffe, responded to Clinton in his stead.

Plouffe said that the two candidates had similar ideas about the housing crisis. The difference, he said, is that Obama is better situated to solve it because he hasn't accepted campaign contributions from lobbyists or political action committees.

"We think this is a fundamental divide for voters," Plouffe said, "and it's one we're going to continue to stress."

The Clinton campaign responded by contending that Obama has received more than $1 million from executives of companies involved in subprime lending.

During the editorial board session, Clinton indicated that she was not altogether sure how her proposals would work in practice but called the ideas "worth pursuing. . . . My biggest complaint is we've spent a year doing relatively little."

The candidate, who hopes to win the Pennsylvania primary April 22, also talked about several other topics:

In the wake of the economic trauma of the last few months, including the bailout of Bear Stearns and the emergence of the mortgage crisis, Clinton said that she favored "exploring" stricter regulation of the financial services industry.

On gun control, she said she hoped that the U.S. Supreme Court, which has a Second Amendment case pending, ruled that gun ownership was a right but "not an absolute right" and was therefore subject to reasonable regulation.

On how her White House years prepared her to deal with crises: "I was usually the first person [former President] Bill [Clinton] would talk to about anything. It was a factor of both proximity and relationship."

On whether she would slow her planned withdrawal of U.S. troops from Iraq if there were increased civil strife: "I don't believe our staying there is going to determine whether the Iraqis eventually stabilize. . . . In some settings, until people are exhausted killing themselves or until someone emerges as a strongman or a legitimate leader, there isn't really much we can do."

At the rally in Blue Bell, billed as "Pennsylvania Women for Hillary," Clinton, who was introduced by U.S. Rep. Allyson Y. Schwartz (D., Pa.), evoked themes of sisterhood and motherhood.

"We have seen changes that are unimaginable for our mothers and grandmothers," she told the crowd jammed inside the gymnasium at Montgomery County Community College. Even when she was growing up, she noted, "there were colleges I couldn't go to, scholarships I couldn't apply for."

Her talk seemed to resonate with her listeners, one of whom told the candidate during the question-and-answer period: "I'd like to say 'Madame President' just once."

Nearly 1,000 people filled the gym. More were directed to an overflow room, and the line to get inside stretched for blocks along campus sidewalks.

Those who attended were largely white, female, and older than 35. Mothers came carrying babies or trailing teen daughters. Two little boys held up a sign that said, "Our Mama's for the Mama!"

"I love her," said Nancy Streit, of Oreland, who hobbled into the event on a cane. "I'd like to see a woman become president."

Clinton concluded her day with a rally in Uniontown in southwestern Pennsylvania. She is to campaign today in Greensburg, near Pittsburgh.

See more campaign coverage online, with videos, slide shows, blogs and interactive sites, at http://go.philly.com/paprimary EndText