Housing bill clears Senate procedural hurdle

WASHINGTON (Reuters) - A bill to save hundreds of thousands of homeowners from foreclosure cleared a procedural hurdle in the U.S. Senate on Thursday and moved a step closer to being sent to the House of Representatives for needed agreement.

On a vote of 84-12, more than the required 60, the Senate agreed to proceed with the legislation, and could send it later in the day to the House, where it faced a number of potential amendments.

The legislation was conceived to help ease a wave of failing loans that have swept across the nation and sent financial markets into a tailspin.

President George W. Bush has threatened to veto the legislation, which he has called too costly and beneficial to banks. But lawmakers from both parties will likely pressure him to endorse the bill during an election year when the housing crisis is weighing on voters' minds.

The bill had been delayed for weeks by Sen. John Ensign, a Nevada Republican who unsuccessfully sought to attach a package of renewable energy tax breaks to it. Senate leaders have largely been able to outlast those stalling tactics and drive the legislation forward.

The House and Senate have approved similar versions of the housing measure but must now iron out differences and pass a final one that Bush may sign.

At the heart of the election-year legislation is a plan to create a government-backed mortgage insurance fund and a new regulator for mortgage-finance companies Fannie Mae and Freddie Mac.

Shares of the two companies have tanked this week as investors fret over the whether the two government-sponsored enterprises have the reserves needed to survive sinking home values and soaring defaults.

(Reporting by Thomas Ferraro and Patrick Rucker; Editing by Jonathan Oatis)