A housing rescue bill aimed at helping distressed homeowners recently passed a test vote in the Senate. 60 votes were needed to close the debate on the bill and it received 83. However, problems still loom with the president threatening a veto over certain sticking points. In particular, the White House is opposed to giving $4 billion dollars to states to purchase properties that have been foreclosed upon. President Bush sees this as a way to help out the banks that financed these risky loans and not the borrowers who have been hurt by predatory lending practices.
The bill would affect the FHA by allowing it to back $300 million worth of loans for approximately 400,000 who would not normally meet the FHA standards. Opponents of this part of the plan argue that this lowering of the FHA's already relatively lenient standards will only lead to more foreclosures in the future and could potentially result in the demise of the FHA. Proponents argue that, at the current time, this is the best solution for the hundreds of thousands of homeowners in trouble.
Because of the Congress's Fourth of July recess (July 1st – 10th) progress on the bill is unlikely until mid- to late-July.