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Senate Hashes Out Housing Bailout, GSE Bill

WASHINGTON, DC-The bill is going to mark up today and will then be presented to the full Senate and ultimately the president.

By Erika Morphy | Updated on May 20, 2008

WASHINGTON, DC-Senator Chris Dodd (D-CT) and Senator Richard Shelby (R-AL)–the chairman and ranking member of the Senate Committee on Banking, Housing, and Urban Affairs, respectively–have reached agreement on a sweeping piece of legislation that will offer a mortgage bailout plan for certain homeowners facing foreclosure, establish an affordable housing trust fund and provide the long-awaited roadmap for GSE reform.

The legislation would enable the Federal Housing Administration to offer mortgage guarantees in certain situations in which the lender writes down a portion of the outstanding loan. It also creates an independent regulatory for Fannie Mae and Freddie Mac called the Federal Housing Finance Agency. The bill also calls for the establishment of an affordable housing trust fund.

The bill, “the Federal Housing Finance Regulatory Reform Act of 2008,” is going into mark-up this morning, after which it will be presented to the full Senate for a vote.”This legislation is good news for both the markets and homeowners,” says Dodd in a prepared statement. “The bill addresses the root of our current economic problems–the foreclosure crisis–by creating a voluntary initiative at no estimated cost to taxpayers which will help Americans keep their homes. The bill also establishes a new fund that will help create more affordable housing for millions for Americans.”

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