By Patrick Rucker
WASHINGTON, May 19 (Reuters) - The U.S. House of Representatives on Tuesday approved the final tweaks to a housing rescue bill that will aid the homeless and aims to save families from foreclosure.
Lawmakers have spent weeks trying to hash out a compromise bill to try to help stem a three-year-long housing crisis that has seen record defaults and double-digit price declines.
Specifically, the bill will retool a federal program meant to refinance 400,000 homeowners and inject a fresh $2.2 billion into the largest federal homeless aid program over the next two years.
Tenants who face eviction because of a landlord's default could serve out the rest of their lease under the bill while banks could rely on more rescue funds from government underwriters.
Democrats want the bill to clear Congress by Friday so that they may present it to President Barack Obama and boast about a legislative victory before they take a week-long vacation.
Both the U.S. Senate and House of Representatives have passed their own versions of reform as the legislation's scope has significantly narrowed in recent months.
A provision that would have let bankruptcy judges erase some mortgage debt was scrapped and the bill does not include broader mortgage lending reform sought by Representative Barney Frank, chairman of the House Financial Services Committee.
Bank of America, JPMorgan Chase and Wells Fargo & Co led the effort to strike the bankruptcy provision, which would have let judges 'cramdown' the amount of an outstanding mortgage loan.
'The banks who brought us this crisis in America have resisted this chance to do something about mortgage foreclosure,' Senator Richard Durbin, an Illinois Democrat, said of the provision that failed in late April.
Lenders warned that investors would be spooked by the uncertainty of giving bankruptcy judges broad new powers.
By a vote of 300-114, the House approved a measure earlier this month that would have forced mortgage lenders to retain a 5 percent stake in home loans they make, securitize and then sell to investors.
That bill, which also includes other consumer protections, is now orphaned in the Senate and so its prospects are uncertain, though Frank has said the deepening housing crisis is likely to spur passage.
'The health of the housing market and potential success of the Obama housing rescue plan will dictate what happens from here,' said Brian Gardner, vice president at investment firm Keefe Bruyette & Woods.
Foreclosures in April jumped 32 percent from a year ago with 1 in every 374 mortgage-holders receiving a notice of default, according to the real estate data firm RealtyTrac. In March, the value of existing homes was off 12.5 percent from a year earlier, the National Association of Realtors said.
The legislation would ease terms under which the Federal Housing Administration may refinance troubled borrowers so that the program may assist more households. But only a handful of borrowers have been reached by the Hope for Homeowners program since it was conceived last summer.
The FHA will claim $1.244 billion of a $700 billion government rescue fund to cover some costs of the program.
Congress authorized that rescue kitty in October and lawmakers have closely scrutinized the multibillion-dollar investments meant to stabilize Wall Street.
Officials would have to write tougher new conflict of interest rules for future rescue programs under one provision of Tuesday's bill. Keywords: FINANCIAL CONGRESS/HOUSING (patrick.rucker@thomsonreuters.com; +1-202-310-5474; Reuters Messaging: patrick.rucker.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
WASHINGTON, May 19 (Reuters) - The U.S. House of Representatives on Tuesday approved the final tweaks to a housing rescue bill that will aid the homeless and aims to save families from foreclosure.
Lawmakers have spent weeks trying to hash out a compromise bill to try to help stem a three-year-long housing crisis that has seen record defaults and double-digit price declines.
Specifically, the bill will retool a federal program meant to refinance 400,000 homeowners and inject a fresh $2.2 billion into the largest federal homeless aid program over the next two years.
Tenants who face eviction because of a landlord's default could serve out the rest of their lease under the bill while banks could rely on more rescue funds from government underwriters.
Democrats want the bill to clear Congress by Friday so that they may present it to President Barack Obama and boast about a legislative victory before they take a week-long vacation.
Both the U.S. Senate and House of Representatives have passed their own versions of reform as the legislation's scope has significantly narrowed in recent months.
A provision that would have let bankruptcy judges erase some mortgage debt was scrapped and the bill does not include broader mortgage lending reform sought by Representative Barney Frank, chairman of the House Financial Services Committee.
Bank of America, JPMorgan Chase and Wells Fargo & Co led the effort to strike the bankruptcy provision, which would have let judges 'cramdown' the amount of an outstanding mortgage loan.
'The banks who brought us this crisis in America have resisted this chance to do something about mortgage foreclosure,' Senator Richard Durbin, an Illinois Democrat, said of the provision that failed in late April.
Lenders warned that investors would be spooked by the uncertainty of giving bankruptcy judges broad new powers.
By a vote of 300-114, the House approved a measure earlier this month that would have forced mortgage lenders to retain a 5 percent stake in home loans they make, securitize and then sell to investors.
That bill, which also includes other consumer protections, is now orphaned in the Senate and so its prospects are uncertain, though Frank has said the deepening housing crisis is likely to spur passage.
'The health of the housing market and potential success of the Obama housing rescue plan will dictate what happens from here,' said Brian Gardner, vice president at investment firm Keefe Bruyette & Woods.
Foreclosures in April jumped 32 percent from a year ago with 1 in every 374 mortgage-holders receiving a notice of default, according to the real estate data firm RealtyTrac. In March, the value of existing homes was off 12.5 percent from a year earlier, the National Association of Realtors said.
The legislation would ease terms under which the Federal Housing Administration may refinance troubled borrowers so that the program may assist more households. But only a handful of borrowers have been reached by the Hope for Homeowners program since it was conceived last summer.
The FHA will claim $1.244 billion of a $700 billion government rescue fund to cover some costs of the program.
Congress authorized that rescue kitty in October and lawmakers have closely scrutinized the multibillion-dollar investments meant to stabilize Wall Street.
Officials would have to write tougher new conflict of interest rules for future rescue programs under one provision of Tuesday's bill. Keywords: FINANCIAL CONGRESS/HOUSING (patrick.rucker@thomsonreuters.com; +1-202-310-5474; Reuters Messaging: patrick.rucker.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.