Senate Banking Committee Reaches Consensus on Bailout Bill
The Senate Banking Committee reached a consensus on new legislation designed to help homeowners, forestall foreclosures and create more affordable housing in a government-led bail out attempt to save the housing market from imploding on itself. The ranking Republican on the committee Richard Shelby said he’s comfortable that the bill protects American taxpayers from covering for bad bets made by speculators.
From Housing Wire:
Primary Republican opposition to the proposal stemmed from perceived taxpayer funding of the proposed FHA expansion, our sources suggested; restructuring the expansion bill to push the costs more directly onto the GSEs, as numerous media outlets have reported over the weekend, may solve some of those concerns.
The President is in favor of providing assistance to distressed homeowners as long as the bill doesn’t reward financial risk-takers who gamed the system for financial gain.
From Housing Wire:
“Our policy in this administration is [that] laws shouldn’t bail out lenders, laws shouldn’t help speculators, the government ought to be helping creditworthy people stay in their homes,” he said in remarks delivered at a White House press conference Monday afternoon.
From Market Watch on the banking committee’s approval of the new bill:
The top members of the Senate Banking Committee reached agreement Monday on legislation intended to help the ailing housing market and impose tougher rules on mortgage-finance giants Fannie Mae and Freddie Mac.The committee is scheduled to vote on the bill on Tuesday morning. It aims to prevent more foreclosures and create more affordable housing, and it would result in a new regulator overseeing both Fannie and Freddie.Faced with the struggling housing market, senators have been negotiating for weeks over the form of a new bill. The House has passed a similar version, which would allow the Federal Housing Administration to insure up to $300 billion in refinanced mortgages.The Senate’s bill “addresses the root of our current economic problems — the foreclosure crisis — by creating a voluntary initiative at no estimated cost to taxpayers which will help Americans keep their homes,” said committee Chairman Christopher Dodd, D-Conn.The panel’s top Republican, Richard Shelby of Alabama, said he’s satisfied the bill protects the U.S. taxpayer.