Rescue Plan Leads Housing Package

Washington Post (05/02/08) P. D1; Montgomery, Lori; Birnbaum, Jeffrey H.
Democrats have included a provision to overhaul the Federal Housing Administration (FHA) in a broad housing package with hopes of convincing Republicans to sign on to a housing bill that also seeks to keep troubled borrowers from losing their homes to foreclosure. The House Financial Services Committee voted 46 to 21 to approve the housing package, which would allow the FHA to insure mortgages for the most distressed borrowers and insure $300 billion more in mortgages, establish tougher regulation of Fannie Mae and Freddie Mac and create a $7,500 tax credit for first-time home buyers to help prop up residential prices. "This should be a signal to the system that significant help is on the way," said Rep. Barney Frank, D-Mass., chairman of the key committee and chief architect of the housing bill. The full House is likely to vote on the housing package next week, but Senate Banking Committee Chairman Christopher Dodd, D-Conn., says he may need more time to negotiate with Republicans.