Bush could get US mortgage plan by early July
By John Poirier
WASHINGTON (Reuters) - The U.S. Congress could send a package of proposals for housing and mortgage reform to the White House by July 4, a senior House Democrat said on Tuesday.
Rep. Barney Frank, chairman of the House of Representatives Financial Services Committee, said the package was aimed at saving troubled U.S. homeowners from foreclosure.
The package would include expanded powers for the Federal Housing Administration and other reforms for government-sponsored mortgage finance companies, he said.
"I think it's possible to do this," Frank told reporters after speaking at a banking conference.
Asked if he expects President George W. Bush to veto the FHA proposals on concerns taxpayer money would be put at risk for home loans, Frank replied "not at this time."
In his speech before the Independent Community Bankers of America trade group, Frank said, "This administration started out very skeptical of Fannie Mae and Freddie Mac.
"It is now clear, given where we are, that Fannie Mae and Freddie Mac are indispensable sources of liquidity in the housing market."
Fannie Mae (FNM.N) and Freddie Mac (FRE.N) are government-sponsored enterprises, or GSEs, that buy mortgages from lenders, who are then freed up to provide mortgages to more borrowers.
Frank's committee is meeting again this week to wrap up a pair of bills aimed at expanding FHA powers to guarantee refinanced mortgages and provide money to states to deal with foreclosures.
He said his committee has been working out differences over the proposals with Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson and said talks were progressing.
One of the major obstacles to agreement between the Republican administration and congressional Democrats is how strong a regulator Fannie Mae and Freddie Mac should have. Both GSEs recently emerged from accounting scandals.
"We're not obviously in complete agreement (on the package), but we're getting closer," Frank told the community bankers. "I think that package could pass. I think that's the best we can do."
Paulson told Reuters last week that he likes parts of the proposals laid out by Democratic lawmakers to expand the federal mortgage guarantee program and said he was cautiously optimistic that a new GSE regulator could be created.
The Senate Banking Committee is scheduled to meet next week to discuss an FHA bill that as it stands would provide more in guarantees than Frank's bill to help distressed homeowners.
The House of Representatives could finalize various housing and mortgage bills in May and the Senate could finalize their work in June, a House committee aide said.
(Reporting by John Poirier, Editing by Andrea Ricci)
