Senate Passes Foreclosure Rescue Bill

Plan Will Back FHA Loans To Give Struggling Homeowners New Fixed Rate Mortgages

(CBS/AP)  The Senate has passed a massive housing aid package to save hundreds of thousands of homeowners from foreclosure.

Struggling homeowners who can't afford their mortgages and banks facing big losses would get government help under a foreclosure rescue that has broad bipartisan support.

The $300 billion plan was approved on 63-5 vote that reflected broad bipartisan support despite a White House veto threat.

Final action on the legislation is weeks off. The House wants to rewrite some details, and lawmakers are negotiating with the White House in efforts to avoid a veto.

The centerpiece of the plan would let the Federal Housing Administration back up to $300 billion in new loans to give struggling homeowners more affordable, fixed-rate mortgages. It allows lenders who agree to take a substantial loss on the mortgages to reclaim at least some money and avoid a costly foreclosure.

Rep. Barney Frank, D-Mass., the Financial Services Committee chairman and an architect of the bill, said the few but significant revisions House leaders are seeking could be made in as little as one week. Key players are preparing for a week of intense negotiations to resolve differences on Capitol Hill and with the White House, with an eye toward producing a bill President Bush could sign later this month.

The measure includes a long-sought modernization of the FHA and would create a new regulator and tighter controls on Fannie Mae and Freddie Mac, the government-sponsored mortgage giants. It also would provide $14.5 billion in housing tax breaks, including a credit of up to $8,000 for first-time home buyers.

Congressional Democrats are divided over important elements of the plan, including limits on loans the FHA may insure and Fannie Mae and Freddie Mac may buy. The Senate measure sets them at $625,000, while House leaders - including Speaker Nancy Pelosi, D-Calif., - want the cap as high as $730,000.

House leaders also oppose the immediate effective date of the Senate plan, preferring to phase in the new regulations for Fannie Mae and Freddie Mac over six months.

Shares of the two government-chartered mortgage financers have taken a beating over the last two days and are currently trading at levels last seen in the early 1990s. If the prices don't recover, the two companies will have difficulty raising more money through stock sales to compensate for their own losses from the housing bust. Investors are afraid their stakes will vanish if the government is forced to rescue the companies along with distressed homeowners.

Another key point of dispute is $3.9 billion in the Senate measure for buying and rehabilitating foreclosed properties. The House's band of conservative "Blue Dog" Democrats oppose the money, arguing that it would swell the deficit unless paired with cuts or tax increases to cover the cost.

But many Democrats, particularly members of the Congressional Black Caucus, are fighting to keep the funding, which they say will help prevent the communities hardest hit by the housing crisis from sliding into blight.

The White House singled out the money in its veto threat, calling it a bailout for lenders who helped cause the mortgage meltdown.

Lawmakers and the Bush administration agree on the central concept behind the measure: allowing the government to backstop new mortgages for struggling homeowners.

To make it more palatable to Republicans, the Senate measure would take responsibility for any losses away from taxpayers and instead cover them by diverting an affordable housing fund drawn from Fannie Mae and Freddie Mac profits.

[noloyalisti]

The right wingers must be against this bailout because they believe in the free market. Free for corporations and costs the workers dearly.

I am glad everyone is staring to realize what a failure the Republicans are with their erroneous Ray Gun economic policies of disaster.

[triplet-man]

THATS IT !! I''m just going to start being a "screwup" on welfare and make poor credit choices - AND THE FED WILL BAIL ME OUT! With every other decent honest hardworking SMART citizens tax money.

RIGHT?

[forthepeopl1]

your goverment hidding 7 oil well ready to produce all the oil we can handle,from 1970 until now they have held these,already drill and cap,just hook up. there more oil and gas than all of russia,and saudia,together..come americans demand they come clean


The Energy Non-Crisis
Forword

The honesty, integrity, and therefore the credibility, of the authors of this book is unquestionable to the limit of their combined facts and knowledge.

I can personally attest to many of the facts, and certainly many of the conversations quoted in the book, as I spent a week with Chaplain Lindsey on the North Slope of Alaska during the construction of the Trans-Alaska pipeline. I was privileged to talk with high officials of Alyeska Pipeline Service Company. For reasons unknown to me, I was given access to private information that apparently very few outsiders were ever given. I moved among the men at work and in the baracks. Our President has stated that our energy problem is the equivalent of war. Yet he has embraced policies that have continually discouraged and hampered the development of our oil industry.

It is with great pride and pleasure that I endorse this manuscript and compliment the authors for taking time to do the research and make it available to all of us.

March 19, 1980 Hugh M. Chance
Former Senator of
The State of Colorado

please goggle gas price manipulation and gull island oil. or just gull island iol and gas.

[forthepeopl1]

as i have stated many time over the past few years take your money and run people. indy is just one of the biggest in this country, and there has been over 50 smaller ones , this is only the beginning. clean out you stock and all money and put it under the pillow.

what fdic is only good if the govement has money..and it will take you 6 t0 12 months before you get it, and then before you get it you have to file with the govement and they will see if you owe anything and if you dont you will by the time you get your check it will be half of what you owe.

take all money out of wall street and banks..now..dont beleive the goverment on anything..

[baldwin2008]

America, TAKE YOUR COUNTRY BACK!
www.constitutionparty.org
CHUCK BALDWIN 2008!
Do your research and WRITE THE VOTE IN!!!
Obama and McCain will both pull us further into this HOLE and away from our spirit and our roots.
THE CONSTITUTION AND THE BILL OF RIGHTS

[o2bewealthy]

This isn''t a bailout of homeowners - it''s a bailout of lending institutions who thought it didn''t matter if their clients could pay their loans back or not - who thought, "if they can''t pay their loans, we will take over their properties and re-sell them." Bank and lending institutions need to remember that they are in the finance business - not the real estate business. Maybe if they had been more cautious and stuck to what they were supposed to be good at, we wouldn''t be in this mess.

[ringading3]

Thank You Senator Charles Schumer for the RUN on IndyMac!

[whitemale08]

1. Protect the people from foreign and domestic enemy''''''''s.

2. Protect the peoples liberties and freedoms.

3. Protect the borders

That''''''''s it anything beyond this is breaking the law
Posted by WarDogLRS at 06:14 PM : Jul 12, 2008-

These right wing talking points that you hear from junkyard dogs like Michael Savage and Rush Limbaugh don''t mean squat if you don''t have an economy.

Even Michael Savage to some degree understands that but here''s the thing Rambo...

Right now Congress mihgt be moving in to try and bailout Freddie and Fannie this weekend to avoid a crash on Wall Street Monday morning. If they were to do that then they would insantly DOUBLE the national debt of $10 trillion in Federal Reserve Notes.

That my friend would kill off what''s left of this economy by a double acceleration in the already hyper-inflation environment. Gas at $8.00 a gal

Good luck Republicans with your "Borders, Language, Culture."

[Stratmaster7]

1. Protect the people from foreign and domestic enemy''''''''s.

2. Protect the peoples liberties and freedoms.

3. Protect the borders

Please tell me how record deficits and debt borrowed from the Chinese does any of the 3 things above? How does lower taxes for the wealthy, and not taking responsibility for the debt, do any of those 3 things?

[Stratmaster7]

Quit whining everyone. This mental recession is all in your heads... along with the IndyMac collapse. That was all in your heads too. And the $4 gas... the result of your negative thoughts. Spiraling helathcare costs? Quit whining about being sick or injured and quit worrying abotu your families health.

BTW, the greedy banks didn;t allow people who couldn''t afford them to take out loans. they ENCOURAGED them. Many cases are being found where those greedy lendersfalsified income levels etc. in order to qualify borrowers.

[sparks224]

WarDogLRS has a point.
It''s not the government''s job to help working people.
The government should only help billionaires, everyone knows that.

[tryhonesty]

Those of you who do not learn from History are doomed to repeat it...RepubliCON Herbert Hoover...Economic Depression...RepubliCON George W. Bush...Economic Depression...

[wardoglrs]

The problem isn''t government it "you" they uninformed and the uneducated.
You think gov should decide and rule over you..Bad idea
The function of gov is as follows

1. Protect the people from foreign and domestic enemy''''s.

2. Protect the peoples liberties and freedoms.

3. Protect the borders

That''''s it anything beyond this is breaking the law of the land

[stn_sage]

various comments
Posted by txgrouch2006 at 12:34 PM : Jul 12, 2008
-----------------------
My response: In short, you assert that ''the blame game'' whether the Democrats or Republicans are more responsible for the current poor economic shape of the country should cease, that they are both equally guilty!

My friend, you will never convince me that a jaywalker is as guilty as a bank robber, either!

So, we''ll have to agree to disagree on this one!

But, unless this administration is punished for most of the crimes it''s committed, a large segment of people will have little or no respect for the law ever again! Strong nations aren''t built on this type of derision!

[randynason]

let me guess..you are trying to sell obama..


--------------------------------------------------------------------------------

Posted by libsluv2spit

Actually, I think it would be swell to sell Jesse Helms and Tony Snow... to you. Your ideology sounds a little lifeless, anyway.

[randynason]

why are you upset?? are you a criminal or a terrorist?


--------------------------------------------------------------------------------

Posted by libsluv2spit

Neither. I just got a little used to the constitution, since it was a somewhat adequate tool when we ran around in other parts of the world, meddling in other countries'' affairs and policies. What are you- a criminal, terrorist or a neo-conservative lapdog who feels OK with breaking the laws upon which this country was founded?

[libsluv2spit]

Posted by txgrouch2006 at 12:34 PM : Jul 12, 2008
+ report abuse

******************

let me guess..you are trying to sell obama..

[libsluv2spit]

Because Greedy Banks, run by Republicans, allowed people to take out loans when they knew they didn''''t have the means or the credit rating to support the loans.

Posted by FloydZepp2 at 12:26 PM : Jul 12, 2008
+ report abuse

**********


????????????? allowed people to take out loans??

what are you 8? i guess these ''republican'' banks should know better than to lend out to these mindless, clueless, liberal democrat morons

[libsluv2spit]

''''m still dusgusted with the Senate (and House) for passing the wiretapping amnesty bill. Why should I care what Congress does or doesn''''t do? *** ''''em! Take a freaking holiday ''''til, say... next February.

Posted by RandyNason at 02:04 PM : Jul 12, 2008
+ report abuse

*******

why are you upset?? are you a criminal or a terrorist?

[randynason]

I''m still dusgusted with the Senate (and House) for passing the wiretapping amnesty bill. Why should I care what Congress does or doesn''t do? *** ''em! Take a freaking holiday ''til, say... next February.