Senate Housing Bill: $800M Profit Seen

American Banker (06/11/08) P. 4; Sloan, Steven
The Congressional Budget Office (CBO) estimates that the federal government's coffers would expand by $800 million as a result of the Senate's housing bill, which would roll out an FHA refinancing program and revamp regulation of the government-sponsored enterprises. Critics insist the bill would cost too much money to implement, but the CBO anticipates $8 billion in revenue. It notes that the refi initiative likely would cost $68 billion rather than $300 billion cap that was set for the program, but Fannie Mae and Freddie Mac would shoulder the cost through mandatory contributions to an affordable housing fund. Additionally, the CBO says the number of borrowers participating in the refi program could be held down by first- and second-lien holders' reluctance to let them refinance, particularly if they expect the home's value to rise down the road.