Democrats, Republicans May Debate Housing Help Bill Wednesday

Washington, D.C.–Senate Democratic and Republican leaders said Tuesday that they planned to fast track a legislation package designed to help millions of homeowners facing foreclosure, the New York Times reports.The bill may hit the floor as early as Wednesday. The announcement was hailed as a unique bipartisan union–and an indication that Congress, the Bush administration and financial regulators agree that more government intervention is necessary to slow foreclosures and boost the housing market.Some Democrats say the plan could allow risky adjustable-rate mortgages to be refinanced into safer 30-year loans and may aid up to 1.5 million homeowners.The package is said to include up to $200 million for homeowner foreclosure counseling programs and $10 billion in tax-exempt bonds so that local housing authorities can refinance subprime loans. It also is expected to include $4 billion in grants for local governments to purchase foreclosed properties and a $15,000 tax credit for purchasing vacant foreclosed or new homes.On Tuesday, banking trade groups said they were hesitantly supportive of the proposal, which would encourage lenders or loan-servicing firms to cut loan balances in exchange for a government guarantee on loans. Several plans have been suggested recently to help out the troubled mortgage and housing industries. All of the proposals would require homeowners to meet more stringent requirements and be able to pay their refinanced loan.A strong debate is expected this week for at least one proposal, the Democrat-sponsored plan to let bankruptcy judges alter loans on primary residence homes, which Republicans and the mortgage loan industry have opposed.