June 2, 2008
LeAnders Jones

 

On May 20, the Senate Banking Committee voted 19-2 to pass a bill aimed to provide more oversight to Fannie Mae and Freddie Mac, limit foreclosures, and create affordable housing. The bill, which has bipartisan support, includes a provision that would allow the Federal Housing Administration to insure $300 billion in new loans for at-risk borrowers provided that lenders agree to write down loan balances in an amount no greater than ninety percent of the appraised value of the homes of the borrowers. The borrowers would then pay an annual premium to the FHA for the insurance backing their loans and would share their equity with the government if they sold or refinanced their homes. The bill is likely to be voted on by the Senate sometime after the Memorial Day recess. Senate Banking Chairman Christopher Dodd (D-Conn) has said he wants the bill to be cleared by Congress before the Fourth of July recess.