DULUTH -- Years after the collapse of the housing industry caused a drastic turn in the economy of what was once one of the fastest growing places in the nation, U.S. Sen. Johnny Isakson touted a plan Monday to get the industry back on track.
Speaking to a luncheon crowd at the Gwinnett Chamber of Commerce, Isakson talked about his proposed Mortgage Finance Act, which would place Fannie Mae and Freddie Mac into a receivership and create a new Mortgage Finance Agency to guarantee loans.
"Let's go back to fix the problem we had, which was shoddy underwriting," Isakson said, adding that lax regulations meant that people had to follow few requirements to get a home loan before the bust several years ago. "We had a recipe for disaster."
The new agency, he said, would "create a bridge" to private enterprise, although requirements to receive a loan should include a down payment, proof of a job and insurance. His bill would also create a self-funding catastrophic fund to protect taxpayers from the need of another bail out.
"This system will work and the private sector will flock to it," said Isakson, who spent his career in real estate. "We'll have a robust housing market that isn't financed by government guarantees but private enterprise."
Despite a still-high unemployment rate, Isakson said Georgia is in a good position to draw jobs. He noted last week's announcement of a new Caterpillar plant coming to Athens, and said the deepening of the port of Savannah is playing a role in bringing companies here.
He also talked about the need to get a hold on government spending to get a grip on the rising deficit. Entitlements, which make up two-thirds of the problem, have to be considered, he said, although he added that they are "a promise that can't be broken."
"The great thing about this country is we have always rallied in a crisis, and we are in a crisis," he said.
With energy prices going up, Isakson said he drives a hybrid car and that efforts should be made to try every alternative.
"But there is one thing fr sure, America is powered by petroleum," he said, adding that the country needs to be firm against the threats of Iran, which is partially responsible for the price spike. "Every day we reduce our dependence on that ... our security as a nation will be better than ever."