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House approves mortgage bailout

President Bush threatens to veto bill

Posted: May 8, 2008 5:41 p.m.
Updated: July 9, 2008 5:02 a.m.
 
The House of Representatives passed a housing rescue bill on Thursday, providing $300 billion in refinanced mortgages for struggling homeowners.

Entitled the American Housing Rescue and Foreclosure Prevention Act, the bill passed 266-154.
While 39 Republicans joined the Democratic majority, introduced by Rep. Barnett "Barney" Franks, D-Mass., President George W. Bush says he will veto the bill. There are enough House Republicans opposed to the bill to prevent an override of a Bush veto.

"I have real concerns about it," Rep. Howard "Buck" McKeon, who voted against the measure, told The Signal Thursday morning. "The bill puts up $300 billion to help the 10 percent of people who are behind on mortgage payments, versus the 90 percent of people that are currently making their payments on time."

McKeon, R-Santa Clarita, added that the bill also allocates $35 million for lawyers to help defend homeowners in legal action resulting from fighting foreclosure.

However, the White House calls it a burdensome bailout that would open taxpayers to inappropriate risk and reward those who helped cause the housing crisis.

Proponents of the bill argued that the housing package, which was drafted in response to the recent mortgage crisis, was "rescue-oriented and forward-looking." House Democrats argued that the bill would modernize the Federal Housing Administration loan program and improve oversight and administration of several government sponsored enterprises, such as Fannie Mae, Freddie Mac, and the 12 federal home loan banks.

If it survives a veto, the measure would let debt-ridden homeowners refinance into fixed-rate, government-backed mortgages they could afford.

Congressional analysts say the bill could help as many as 500,000 borrowers and cost $2.7 billion over the next five years.

However, McKeon, did not think this measure should pass. "What we are trying to do is get a better bill that really helps people that are truly in trouble, not people who are trying to take advantage of the system and investors," he said.

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