Veto Threatened for Housing Bill

Washington Post (06/20/08) P. D2; Montgomery, Lori
The U.S. Senate has started to debate an ambitious housing relief bill, and a bipartisan majority was able to defeat attempts to dilute or kill the measure. However, the Bush administration has threatened a veto because it opposes creation of an affordable housing fund and the use of some of that money to pay off the debt of borrowers who refinance into, but default on, new Federal Housing Administration loans. "The Senate amendment would--for the first time in FHA's history--require non-program participants to subsidize its loan guarantees," according to the White House, which also is concerned about the "degree of entanglement" between the government and the mortgage finance giants. The bill would also tighten regulation of Fannie Mae and Freddie Mac, modernize the FHA, provide $4 billon to purchase foreclosed properties and offer an $8,000 tax break to some first-time home buyers.