House Passes Housing Bill

The House passed the mammoth housing bill and has sent it to the Senate. The bill aims to restore confidence in the housing market by shoring up mortgage giants Fannie Mae and Freddie Mac, and offering qualified homeowners a chance to refinance their mortgages.

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MELISSA BLOCK, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

ROBERT SIEGEL, host:

And I'm Robert Siegel.

The White House today called the housing bill in Congress essential. And with that, the Bush administration dropped its opposition to parts of the legislation, just about assuring it will become law. The bill is intended to help hundreds of thousands of homeowners avoid foreclosure and to help Fannie Mae and Freddie Mac out of their financial predicaments.

BLOCK: In a few minutes, we're going to consider this legislation from the perspective of people about to lose their homes, but first the view from Capitol Hill, where the House has approved the housing bill.

Here's NPR's Brian Naylor.

BRIAN NAYLOR: Congress has been struggling to put together a response to the housing crisis for months now. And what would seem to be lawmakers' final product touches on many aspects of the problem. There's help for hundreds of thousands of homeowners who are on the brink of foreclosure. There are grants for communities to buy foreclosed properties, tax credits to encourage first-time home buyers, and the rescue plan for Freddie Mac and Fannie Mae.

California Democrat Maxine Waters - who wrote the provision, providing nearly $4 billion to buy foreclosed homes - argued in today's debate that the subprime crises hasn't gone away.

Representative MAXINE WATERS (Democrat, California): It is not getting better. It is getting worse. And we find that community after community is being destroyed because we have boarded up foreclosed homes that are driving down their property values, and they cannot sell them, and they're stuck.

NAYLOR: The Bush administration today backed away from the threat the president would veto the bill over Waters' provision. White House Press Secretary Dana Perino said the Fannie Mae-Freddie Mac rescue package was too important for a prolonged veto fight. Still, many Republicans in Congress wished the president had stuck to his guns. Minnesota Republican Michele Bachmann said the housing bill bails out some who don't deserve it.

Representative MICHELE BACHMANN (Republican, Minnesota): Ninety-five percent of all Americans are paying on time their mortgages, their rents. They weren't a part of this very bad equation. But now they're being asked to come in, to have their taxes raised to bail out irresponsible lenders and, yes, even some irresponsible borrowers.

NAYLOR: Republican Jeb Hensarling of Texas said this Congress will go down as having the worst financial record ever, singling out the rescue package for Fannie Mae and Freddie Mac.

Representative JEB HENSARLING (Republican, Texas): An absolutely breathtaking bailout of Fannie and Freddie that, in its worst-case scenario - which, admittedly, is unlikely - but in its worst-case scenario, could add $5 trillion to the national debt at the snap of a finger.

NAYLOR: Five trillion dollars being the amount of mortgages now backed by Fannie Mae and Freddie Mac. The Congressional Budget Office estimates it could cost up to $25 billion to rescue the mortgage giants, or maybe nothing at all. But no one knows for sure.

The bill would allow Fannie and Freddie to have an unspecified line of credit, and would give the government authority to buy equity in them if they needed more capital. It also provides the institutions with a new regulator, which Republicans say is still insufficient. House Financial Services Committee Chairman Barney Frank of Massachusetts found himself in the unlikely position of urging Republicans to heed the president's lead.

Representative BARNEY FRANK (Democrat, Massachusetts; Chairman, House Financial Services Committee): To some extent, this is a test of our ability as a self-governing people to govern because if everybody held off and said, I'm only going to support a bill with which I am in complete agreement, we would not be able, effectively, to respond to this crisis. So I appreciate the president's policy statement saying, I don't like everything in this bill, but I'm going to sign it, and you should pass it quickly.

NAYLOR: The Senate is likely to act on the measure later this week. It has widespread support on both sides of the aisle. But conservative Republicans who oppose the bill are expected to delay its passage, perhaps into the weekend.

Brian Naylor, NPR News, the Capitol.

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