Senate's Housing Bill Faces Hurdles

American Banker (07/14/08) P. 2; Kaper, Stacy
The Senate passed a housing bill on July 11 that would establish a new regulator for Fannie Mae and Freddie Mac and allow the FHA to insure mortgages for more than the homes are worth once lenders write down a portion of the loan balance, but it remains to be seen whether the bill will be implemented quickly. The measure will return to the House and undergo changes by House Financial Services Committee Chairman Barney Frank, D-Mass., most likely with regard to the Senate's immediate effective date. Senate Banking Committee Chairman Christopher Dodd, D-Conn., says the bill would be effective immediately so that the new regulator can take action quickly to help stabilize the housing market; but Frank insists that to move so fast would be "a mistake." Dodd says it remains uncertain whether Sen. Richard Shelby, R-Ala.--the top GOP legislator on the Senate banking committee--would agree to participate in additional negotiations when the bill returns to the Senate.