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Senate close to approving housing rescue bill
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WASHINGTON (Map, News) - Homeowners struggling to make their house payments could get government mortgage relief under a rescue plan that seeks to revive the chaotic housing market and help reverse the economic downturn.
The Senate is expected Saturday to clear the wide-ranging legislation - considered the most significant housing measure in decades - for President Bush's signature, and the White House says he'll sign it quickly.
The bill gives the government power to throw troubled mortgage giants Fannie Mae and Freddie Mac a financial lifeline, in efforts to prevent the two pillars of the home loan market from going under and causing broader market turmoil.
It is designed to help an estimated 400,000 homeowners escape foreclosure by letting them refinance into more affordable loans backed by the Federal Housing Administration.
The Senate on Friday cleared the last hurdle to its passage on a 80-13 test vote that showed broad support for the election-year package.
Bush, who initially called it a burdensome bailout for irresponsible borrowers and lenders, dropped a threat to veto it this week after his Treasury Secretary, Henry M. Paulson, argued the backstop for Fannie and Freddie was vital to calming markets in the U.S. and abroad.
That was despite his opposition to $3.9 billion the bill sends to neighborhoods devastated by the housing crisis to buy and fix up foreclosed properties. The administration argues that would hurt homeowners by giving lenders an incentive to foreclose rather than help people stay in their homes.
Supporters called the bill a crucial and long-overdue response to the mortgage meltdown that would be a key ingredient to boosting the sagging economy.
"Unless we provide some type of footing for housing in the United States, I do not think that the economy will begin to recover. It is perhaps the most significant economic issue that we face," said Sen. Jack Reed, D-R.I. "This legislation is going to be the linchpin that helps millions of families have decent, safe and affordable housing."
Paulson's request for the emergency power to rescue Fannie and Freddie helped forge a bipartisan deal on the legislation, which also creates a new regulator with tighter controls on the government-sponsored mortgage firms - something Republicans have long sought.
Democrats also won key concessions as part of the compromise, including a permanent affordable housing program to be financed by Fannie and Freddie profits and the $3.9 billion in grants.
Many conservative Republicans are vehemently opposed to the foreclosure rescue, which they call a bailout of reckless homeowners and unscrupulous lenders. They are equally furious about the help for Fannie Mae and Freddie Mac, companies they say enjoy lavish profits in good times and wield their outsized political clout to resist regulation while depending on the government to bail them out should they falter.
Sen. Jim DeMint, R-S.C., slowed the measure's final passage because Democrats refused to allow a vote on his proposal barring the two mortgage companies from lobbying and making political contributions.
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Comments from Examiner Readers
10:41 AM MST on Fri., Jul. 25, 2008 re: "President Bush drops opposition to housing bill"
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Examiner Reader said:
My understanding is this bill will actually help 400,000 individuals. I'm guessing that's only a small fraction of the homeowners who are actually in trouble. How are homeowners who have already been foreclosed on going to feel about this plan at this late date?
1 agree | 1 disagree
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Examiner Reader said:
I am against any bail outs, and I am for criminal prosecution of all who participated in providing these subprime loans. If one can not afford to put a minimum of 20% down lien free and pay all closing costs up front with lien free money then one does not have the right to own a home. Owning one's home is an earned right, not a privilege. And owning a home is not cheap in that you must also always have money set aside to keep the property in good repair.
3 agree | 2 disagree
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Examiner Reader said:
Ill-conceived loans were offered to unqualified buyers on an apparently grand scale and we wonder why the loans haven't performed and the market has taken a nosedive? What is there to wonder about?
4 agree | 3 disagree
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Smell the Coffee said:
Although over a million people are now booted out of their homes and are broke to top it off, Bush still threatens a veto to help struggling owners + his version of a rescue plan is a stimulus package of $600 - in some areas this will last you about 1 week for a fam of 4. The failure of Fred/Fannie should be a clue that this stim pkg didn't jolt the econ + made the hsg crisis worse! I support the bills efforts to address blight, attract home buyers, $730k cap on loan limits. These corrective measures are way late (many people are already homeless), but help can't come soon enough to keep from sinking the econ even worse - we've already seen how it affects other industries + global markets. Good grief, time to smell the coffee + face reality, Prez Bush.
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Examiner Reader said:
old bin laden must be laughing his as off about the self destruction off his enemys country. georges,"we gotta a lota work to do" statement should have been "we gotta a lota money to steal".and the repubs are just the ones to do the latter.
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Examiner Reader said:
this story was eight hours ago.now freddie and fannie are in the crapper. how do these wonderous guys and gals in congress keep up with it all. i know "lets all go on vacation"!!!!!!!!!!!!!!!
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Examiner Reader said:
Major Networks Avoid Dem Senators' Countrywide Loan Scandals
5 agree | 4 disagree
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Examiner Reader said:
This is nothing more than putting off the pain that the Investment banks need to feel in order for housing to become affordable once again. Ever wonder why they want to keep the prices Up?? Well if you leveraged all those loans upwards of 40X I think you would want a bill that stops the process of having to place all those foreclosures squarely back on the balance sheet. Nevermnd it would be at levels of utter fiction (Google "Level 3 Asset Valuations") it would at least be in the general place it needed to be. Thanks Feinstein and Boxer for bailing out your banking buddies while wrapping yourselves in a 'merican flag. I expect it from Feinstein (husband is a piece of work) but not from Boxer. Sad day for the responsible people left in this world.
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Examiner Reader said:
conserative dems (blue dogs), wonder how to pay for the bailout. geez! just take it from the taxpayers,like every other time the banks or sav and loans or wall street has its tit in a ringer. these guys have to learn to plan ahead if they are going to govern by CRISIS
5 agree | 5 disagree
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Examiner Reader said:
veto the foreclosure rescue? guess the politicos or wallstreet havnt figured out how to steal this bailout blind yet.heck! it will be the taxpayers bill,so who gives a damn?
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Examiner Reader said:
the only growth in america is the national debt among others.the rest of the world is just waiting for the govt,"not our govt anymore" to default.
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Examiner Reader said:
three hundred billion dollars would sure go a long way in rebuilding iraq. the hell with america,let those "stupid people" who fell for the the unregulated loan scams eat cake. seems like all the taxpayer does is bail out republican and democrat scams and blame it on someone else. once everyones out of work,where the hell are they going to get the money.we need a new political party in the u s. we could call it "the obfucating reality party". no that wouldnt work ,as we already have two of those partys.
8 agree | 6 disagree
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Examiner Reader said:
this is american growth ? create a problem,then fix it with another.and as time passes the taxpayers will pay for the new buzzardized economy ,and not even realize it.sort of like lincoln savings and loan in the eightys,and enron during flyboys reign
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Examiner Reader said:
republicans arn't going to do squat for this country,its in their genes.
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Examiner Reader said:
no matter what the govt does,the value of your house isnt going to go up past what you owe. sorta of like buying a car.built in depreciation with your signature.
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Examiner Reader said:
now they can mothball their unsold and foreclosed houses and make a little money off the taxpayer. should help with the purchase of that new helicopter for their yacht. probably get a tax break on that too.
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Examiner Reader said:
too bad the administration had to go to the extreme of distroying the economy to get rid of the mortgage interest deduction by foreclosure. oh well, it give the dems more reason to sit on their asses and wait for the next crisis or senate hearing to do nothing about. wish i would have known a long time ago that you can be dysfunctional and ignorant to be a politician repub or dem.
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Examiner Reader said:
since the govt ownes the banks and stock market,they own the foreclosed homes. thats great diminishing collateral for borrowing more overseas money to finance their halfassed wars.
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Examiner Reader said:
all we need now is a dust bowl,and ill bet congress is working overtime on that!
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