Credit Card Tracking Slipped Into Housing Bill
It looks like Sen. Richard Shelby, the ranking Republican that worked with banking committee Chairman Chris Dodd to author a bill that aims to help the country’s mortgage crisis, spoke too soon. When the Senate banking committee passed the bill 19-2 last month, Shelby had said he thought the White House would go for this bipartisan compromise bill.
But the Bush administration is apparently opposing the bill, having issued an unexpected veto threat today, just as the debate on the bill started on the Senate floor.
The most debated portion of the bill would combat increasing foreclosures by setting up a voluntary program. In it, each borrower and the lender both must agree to refinance a home with a fixed-rate mortgage at no more than 87 percent of the value of the home. If the homeowner sells in the future, he has to give up some of the gains. The loans are backed by government guarantees.
The morgage controversy now surrounding Dodd may be lending fuel to the resistance during today’s debate. Republican opponents of the bill (supported across party lines in the committee) said it was a bailout for mortgage lenders. (Dodd is accused of getting a VIP deal from lender Countrywide Financial Corp. on his own mortgages.)
Dodd was visibly angered at the bailout suggestion today. “It’s quite the opposite,” he insisted on the Senate floor. That, he said, “is the last thing we’re doing.” The lenders take a loss on each of the loans, he said. What the bill is about, he argued, is keeping homeowners in their homes.
Shelby agreed. If it were an industry bailout, he said, “We wouldn’t be any part of it.” Shelby said he wants to pass the bill and get the president to sign it before the Fourth of July break.
He said, “We need to pass this legislation now.”
Dodd and Shelby released this combined statement in response to the Bush veto threat at the end of the day:
“This is a disappointing response. We believe this legislation represents a compromise that will bring relief to hundreds of thousands of homeowners and the housing markets without putting the American taxpayer at risk. All the pieces of this package have overwhelming bipartisan support. Furthermore, the legislation includes two major provisions that the Administration has urged the Congress to pass, FHA Modernization and GSE reform. We hope the White House will reconsider its position.”