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THE MORTGAGE MELTDOWN

Housing bill may get boost

July 15, 2008|Janet Hook | Times Staff Writer

WASHINGTON — The Bush administration's emergency move to shore up the mortgage market will reap another dividend on Capitol Hill: It's helping propel into law a broader housing bill that was threatened by wrangling between House and Senate Democrats.

The mortgage initiative unveiled Sunday by the Treasury Department and the Federal Reserve -- which is designed to bolster confidence in home-loan giants Fannie Mae and Freddie Mac -- requires approval by Congress. To expedite the legislative process, it is being attached to the larger housing bill as an amendment.

And, since no one wants to be accused of holding up the Fannie-Freddie package, differences are being swept aside over the larger measure to help some homeowners threatened by foreclosure.

Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate Banking Committee, said he hoped to clear the whole package this week.

"The earlier we can do it the better," he said in a conference call with reporters Monday.

Dodd seemed resigned to dropping a Senate provision to provide almost $4 billion in block grants for states and localities to buy and repair foreclosed properties -- a provision that enjoyed strong support in the Senate but faced a veto threat by President Bush and opposition from budget-conscious House members.

"I regret that," Dodd said. "But we don't need to make the perfect the enemy of the good."

The overall housing bill includes tighter oversight of Fannie and Freddie, but its main provisions would enable holders of some troubled mortgages to receive federal guarantees in exchange for partial write-downs of the loans. Homeowners would also have new federal requirements to qualify for the aid.

Some housing advocates say the White House's sense of urgency could strengthen the bargaining leverage of Democrats in Congress in negotiating final details of the bill.

"So who bends when it is so urgent?" wondered Barbara Sard, director of housing policy at the Center on Budget and Policy Priorities. "Does the urgency make the administration more flexible?"

But if Democrats press their advantage, one Senate strategist acknowledged privately, they might risk slowing the measure and be seen as playing politics with a crisis.

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janet.hook@latimes.com

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