As the housing market continues its downward spiral, D.C. officials are getting on board to recognize there may be some kind of problem going on. WTOP reports that the Department of Insurance, Securities and Banking has signed a contract with the D.C.-based Center for Responsible Lending, which will begin an investigation into subprime mortgage lending in the city. The point of the investigation seems to be mostly getting a head count of people with subprime mortgages in D.C. Afterwards, the group will explore ways to help homeowners who now find themselves with balloon payments and interest rates resetting to unreachable levels.

President Bush spoke last week about financial assistance for certain homeowners in refinancing their mortgages and has encouraged Congress to tackle the Federal Housing Administration’s dated shortfalls. Meanwhile, calls from Democrats and others are urging the big investment banks to offer, to those in danger of foreclosure, lien options that can then be sold on the market.

Many bills percolating through Congress mimic those of D.C. Council member Mary Cheh, which focus more on measures like curbing predatory lending, in an effort to prevent a repeat of the current crisis. Education for current and prospective homeowners should play a big part in reformation of the lending market. As an editorial from yesterday’s Washington Post notes, borrowers are often faced with a void of assistance when it comes to understanding the technical and often very confusing details of mortgages and refinancing. D.C. may want to consider adding their own funds to the $100 million recently approved by the Senate for homeowner counseling.

Photo by outdoor_type.