A $300 billion mortgage rescue package aimed at struggling homeowners today received resounding approval in the Senate. In a show of bipartisan support, 63 senators voted for the bill while five voted it against it.
But the economic lifeline may not reach desperate borrowers anytime soon because the House wants to change the legislation and President Bush has threatened to veto it.
The Senate bill, which is the result of months of debate, would allow subrprime borrowers at risk of foreclosure to refinance with mortgages backed by the Federal Housing Administration. The bill also includes $14.5 billion in housing tax breaks, such as a credit of up to $8,000 for first-time home buyers.
The bill would create a new regulator for government-sponsored mortgage giants Fannie Mae and Freddie Mac, which this week saw their shares plummet amid concerns that they will have to raise more funds to cover growing losses stemming from the slumping housing market.
On the Senate floor Thursday, Sen. Chris Dodd, D-Conn., urged quick passage of the bill.
"When you wake up in the morning and have a foreclosure, you have to face your children, have to face your spouse. Two-hundred fifty-thousand [people] will do that in the month of June, and we're still here debating this bill."
"We can't wait any longer," Dodd added later. "We've gone weeks now going through the parliamentary rigamarole here in the Senate."
Though several Republicans have opposed and delayed the bill, it has broad, bipartisan support in the Senate.
But the measure faces a tougher road in the House, where fiscally minded "blue dog" Democrats are concerned about the measure's tax provisions and as well as another key point in the bill: $3.9 billion grants to hard-hit communities to buy and rehabilitate foreclosed homes. The White House has also objected to the proposed grant program, criticizing it as a bailout for lenders.
Democrats in the Senate and House disagree on the size of the loans to be insured by the Federal Housing Administration and bought by Fannie Mae and Freddie Mac. The Senate measure would cap the loans at $625,000, while some House members have fought for a limit as high as $730,000.
The Associated Press contributed to this story.