ORDINARILY, I AVOID TALKING ABOUT BREAKING news in my column because my message is prepared a few weeks before it is actually published, and a lot can change in that time. This month, however, I am making an exception because it is important for you to know the actions the NAHB has been taking to address the disruption of the nation's mortgage markets.

MARKET TURMOIL A major clampdown on subprime mortgages began earlier this year when it became evident that some adjustable-rate loans were unsound and that borrowers were having difficulty making their payments after their loans were reset at a higher interest rate. The credit crunch subsequently spread to alt-A and jumbo loans, and in August we saw the trouble in housing spread to the financial markets, which forced the Federal Reserve to take some unusual steps to provide liquidity, along with assurances that it was monitoring the situation closely. The health of the mortgage market is by far the top economic concern in Washington today, and the NAHB is working on several fronts—with leaders from government, finance, and other housing organizations—to help restore confidence and availability of credit for those who want to buy a home.

I should add that conventional, conforming loans that are limited to $417,000 and can be sold to Fannie Mae and Freddie Mac have, for the most part, remained unaffected by the crunch. But the implications are serious for prospective home buyers who are at the lower end of the financial scale, who are looking for their first home, or who live in a high-priced area, such as my home state of California, and we are moving aggressively wherever we can to avoid a real crisis in our industry.

FACING THE CHALLENGE As I write this, we are only a day or two away from the NAHB Fall Board Meeting in Seattle and solving the crunch will be at the center of our deliberations. Our directors will adopt policy to attack the problem on several crucial fronts, among them: reducing interest rates at the Federal Reserve; temporarily lifting the portfolio limits on Fannie and Freddie so that they can provide institutions with additional liquidity; and modernizing the FHA. At the meeting, builders will also hear business-related advice from NAHB veterans who have successfully weathered previous downturns. We have also updated our “Toolkit for a Challenging Housing Market,” with targeted information that our members can use to make the most of today's tough times.

I am also preparing for meetings with Fed Chairman Ben Bernanke and the CEOs of Fannie and Freddie. In August, NAHB leaders met with the director of the Office of Federal Housing Enterprise Oversight (OFHEO) and the undersecretary of the Treasury's Office of Domestic Finance. We met in New York with the two primary rating agencies that downgraded the mortgage-backed instruments that precipitated the turmoil on Wall Street. We hosted a meeting that included leaders from the housing regulators and major banking, finance, and real estate groups. And the NAHB's CEO and chief economist have appeared in the major news media to put this issue into perspective and refute some of the misinformation and negative reporting that has scared consumers.

We have the best housing finance system in the world, and we are working overtime to see it restored to full health.