Bailout Bills Working Their Way Thru Congress

House and Senate banking committee leaders are close to an agreement on
a landmark housing bill, according to sources, and the Senate might vote on
the measure this week.

Committee members and staffers worked over the weekend trying to iron out the
final details of a legislative package that would strengthen regulation of the
government-sponsored enterprises Fannie Mae and Freddie Mac, modernize
the Federal Housing Administration mortgage insurance programs, and
authorize the FHA to redfinance 400,000 to 500,000 at-risk borrowers to prevent
foreclosures.

Last Friday, a spokesman for Senate majority leader Harry Reid, D-Nev., said
the housing bill could come up for a vote as early as this week.

There have been concerns that the legislative schedule is so crowded that it might be
difficult to bring the GSE/FHA package to the floor before July Fourth.

Meanwhile, the most contentious issues involve how high to raise the
GSE/FHA loan limits and the use of taxpayer funds to pay for the
FHA foreclosure rescue package.

The Senate bill taps Fannie and Freddie to pay up to $960 million over
three years to cover the costs of the FHA program -- an approach strongly
supported by Sen. Richard C. Shelby, R-Ala., and other Republicans who
don't want taxpayer funds used to bail out irresponsible homeowners.

The House bill uses taxpayer funds. Many observers believe that the House
will have to agree to Sen. Shelby's approach in order to move the housing
bill through the Senate.

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