Released: September 19, 2007

House OKs plan to stem mortgage concerns

Source: Associated Press [USA Today]

The House on Tuesday approved a plan to expand federal backing of mortgages in hopes of helping struggling homeowners avoid foreclosure.

The bill, which passed the House, 348-72, would allow the Federal Housing Administration, which insures mortgages for low- and middle-income borrowers, to back refinanced loans for tens of thousands of borrowers who are delinquent on payments because their mortgages are resetting to sharply higher rates from low initial “teaser” levels.

The measure, which exceeds limits favored by the Bush administration, is Congress’ first stand-alone bill in response to the mortgage-market tumult of the summer, which came amid a rising tide of defaults and foreclosures. The Senate last week passed spending legislation that includes $200 million to provide aid to non-profits and other groups that offer counseling and information to help homeowners avoid foreclosure.

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