Senate rejects bankruptcy revamp on housing

WASHINGTON (Reuters) - The U.S. Senate on Thursday voted against adding an amendment to a housing market rescue bill that would have given bankruptcy judges the power to ease mortgage payment terms for some distressed borrowers.

Offered as an amendment by Illinois Democratic Sen. Richard Durbin to a broad bill hammered out earlier this week, the amendment was opposed by Republicans and the banking industry.

The overall bill, estimated to cost $15 billion to $20 billion, would give homebuilders and other businesses hit hard by the recent housing slump a $6 billion temporary tax break.

It would also give the Federal Housing Administration a bigger role in the mortgage market and create additional tax incentives to stimulate the housing business.

(Reporting by Kevin Drawbaugh; editing by Carol Bishopric)