Housing Rescue Package Slated For House Vote

WASHINGTON (AP) -- A broad housing rescue package aimed at preventing foreclosures would have the government step in to insure up to $300 billion in new mortgages for struggling homeowners.

The plan, designed to stabilize a key sector of the shaky economy, is set for a House vote Wednesday. It would let the Federal Housing Administration insure more affordable fixed-rate loans for borrowers currently too financially strapped to qualify. The White House says President Bush would veto the measure, calling it a burdensome bailout that would open taxpayers to too much risk. That's despite Democrats' attempts to attract Republican support by including a grab-bag of measures Bush has called for. They include legislation to overhaul the Federal Housing Administration, the Depression-era mortgage insurer, and to more tightly regulate Fannie Mae and Freddie Mac, the government-sponsored companies that finance home loans. Also part of the plan is a measure, which Bush has repeatedly requested, allowing state and local housing finance agencies to use tax-exempt bonds to refinance distressed subprime mortgages.

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