"It is my desire that we fashion legislation that will enjoy broad-based support. It may not be possible in the end," Dodd said. "If it doesn't happen, so be it, but we're not going to have it not happen because we didn't try."
In a statement issued late Thursday, he said he was "very close" to an agreement with Shelby and was "optimistic" the two could bring a bipartisan bill to the Senate floor.
Shelby said the two had reached a deal that was "palatable to everybody," which would tap a fund designed to pay for building housing for poor families to finance the new foreclosure-prevention program.
Without it, Republicans call the program a bailout that would open taxpayers to undue risk. President Bush cited that concern when he threatened to veto a similar, House-passed rescue plan.
Diverting the affordable housing fund - which is to be drawn from Fannie Mae and Freddie Mac profits - will "save the taxpayers money," Shelby said. It's "something the White House will sign," he added.
Some Democrats were unhappy about the plan, which would at least temporarily steer a funding stream they have long sought to help low-income people avoid homelessness to a homeowner rescue program aimed instead at helping middle-income people avoid foreclosure.
Still, it appeared most would be willing to accept the bargain in the interest of advancing the homeowner rescue plan, said senior Senate Democratic aides, speaking on condition of anonymity because the deal is not yet final.
May. 15, 2008 06:34 PM
Associated Press
WASHINGTON - A key senator postponed action Thursday on a homeowner rescue package that could help half a million strapped borrowers get government-backed mortgages, as negotiators inched toward a bipartisan deal.
The delay on the action until next week clouded the prospects of an emerging compromise between Sen. Christopher J. Dodd, D-Conn., the Banking Committee Chairman, and Sen. Richard C. Shelby of Alabama, the panel's senior Republican. It also highlighted the tricky political calculations involved in reaching a bipartisan housing deal in an election year when the two parties are competing intensely to appeal to voters who cite the economy as their top concern.
Dodd and Shelby said Thursday that they were near agreement, but after hours of stop-and-start haggling, particularly over how to pay for the plan, Dodd canceled a committee session to vote on the measure. Also at issue was how tightly to regulate government-sponsored mortgage giants Fannie Mae and Freddie Mac.
The measure allows the Federal Housing Administration to back up to $300 billion in new loans for debt-ridden homeowners facing foreclosure, who would otherwise be considered too financially risky to get a fixed-rate, government-insured loan. Congressional analysts project it would cost about $1.7 billion over the next five years.
Affordable housing advocacy groups unleashed a barrage of telephone calls and e-mails on senators to protest the emerging agreement.
"We will be deeply disappointed if money which has been advocated for and intended for some time to help build housing for extremely low-income people gets diverted away for this foreclosure problem," said Sheila Crowley, president of the National Low Income Housing Coalition. "It would be just a travesty."
Staff aides to Dodd and Shelby, who have been negotiating for weeks in search of an elusive deal, worked overnight Wednesday and were still haggling over details late Thursday.
A major sticking point has been how to insulate taxpayers from risk should homeowners who got government help default on their new mortgages.
Sen. Mel Martinez, R-Fla., called the idea of using the affordable housing fund "brilliant."
Under a tentative agreement, the entire $600 million fund would be used to pay for the mortgage rescue in the first year of the plan, three-quarters of it in the second year, and one quarter of it in the third year. After that, all the money would go to affordable housing as originally intended.
To qualify for the proposed FHA program, borrowers would have to show they could afford the new loans, while mortgage holders would have to agree to take a substantial loss on the existing loan in exchange for avoiding a costly foreclosure. The FHA would share at least half of any proceeds if the homeowner refinanced again or profited from selling the home.
The Senate developments came as Rep. Barney Frank, D-Mass., the Financial Services chairman who wrote the House bill, signaled that his hopes for a broad housing agreement with the White House were fading.
"I won't tell you I'm optimistic, but I think there's a reasonable chance," Frank told reporters after addressing a Realtors' conference. "We're still trying to keep working together."
Frank told the Realtors they should encourage Senate Republicans to back the homeowner rescue plan, and said Bush's opposition was no excuse for inaction.
"The Constitution says the president gets to veto the bill after we pass it," Frank said, "not that he gets to threaten to veto it so we can all duck a tough issue."
No comments:
Post a Comment