DES MOINES - A housing bill being considered in Congress could lend a hand to Iowans struggling to make mortgage payments, Sen. Tom Harkin said Thursday.

A provision in the bill assists homeowners who can't make their payments get a new fixed-rate mortgage they can afford.

"This could help a great deal and this could help some people in Iowa, too," Harkin said during a conference call with reporters.

The House approved the bill this week, and Harkin said he expects the Senate to follow suit.

Supporters say the bill can help stabilize a U.S. housing market staggering under the weight of a growing number of home foreclosures.

It aims to help around 400,000 struggling homeowners trade their current loans for discounted 30-year loans with fixed interest rates.

President George W. Bush originally threatened to veto the massive bill because he disagreed with some of its spending, but he has since revoked the veto threat in the hopes of taking action before Congress goes into recess next month.

Shawna Lode, communications director for the Iowa Finance Authority, said she's hopeful that the bill can help bail out Iowans worried they can't make their mortgage payments.

"We've been watching that bill for many months, and we're thrilled to see progress with it," Lode said.

She said Iowans won't know exactly how they can benefit from the housing bill until it's signed into law.

Lode encouraged struggling homeowners to call a mortgage help hotline for free financial counseling or help refinancing a home loan.

The hotline's telephone number is 1-877-622-4866.

She said 1,300 Iowans have applied for help through the hotline since March 1.

Dawn Mutum-Plies, director of housing for United Neighbors Inc. in Davenport, said Congress hasn't acted quickly enough to save many Iowans from home foreclosure.

Mutum-Plies said some lending institutions have been engaging in predatory practices for years, and Congress should have already cracked down on those institutions.

Still, she's heartened by the interest in the new housing bill.

"It's a start, and when they're actually in the process of taking action that's a good thing," she said. "I'm just hoping that it's enough, and it's not too late."

She said her organization has worked with 166 people seeking help with foreclosure prevention this year.

Iowa has a bigger problem with delinquency related to subprime home loans than most states, said Patrick Madigan, an Iowa assistant attorney general who works on housing issues.

Madigan said Iowa ranks as high as 13th in the nation on its percentage of subprime loans that result in foreclosure notices.

But some argue that figure is bloated because Iowa's foreclosure process is among the longest in the nation, meaning more people are dealing with foreclosures at any given time, he said.

He said homeowners sometimes tend to stop responding to their lending institutions if they can't make their payments, but he urged homeowners to stay in touch with the lender.

"The first thing that you recommend is to communicate. A lot of people kind of shut down and they stop opening their mail," he said.

Madigan said a home foreclosure often costs the lender as well as the homeowner, so he said lenders sometimes renegotiate the terms of the loan to make it affordable.

Contact Fred Love at

(515) 243-0138 or

fred.love@lee.net.