Senate presses ahead on housing

By Kevin Drawbaugh

WASHINGTON (Reuters) - The Senate will begin debate on a major housing market rescue bill on Thursday, Senate Majority Leader Harry Reid said on Wednesday, spurning calls for delay by Republicans who cited concerns about a controversy involving two Democrats and a mortgage lender.

In a letter that a Reid aide called "disgraceful," nine Republican senators asked Reid, a Nevada Democrat, to delay consideration of the housing legislation, which advocates say could save thousands of homeowners from foreclosure.

The Republicans said they wanted time to study the bill and they were "concerned with recent allegations" related to Countrywide Financial Corp, a lender under federal investigation over its role in the U.S. mortgage crisis.

Two Democratic senators -- Connecticut's Christopher Dodd and North Dakota's Kent Conrad -- have recently acknowledged that they financed properties with Countrywide. Both have said they did nothing wrong in doing business with Countrywide.

The letter from the Republicans did not specifically mention Dodd or Conrad. But both have been the subject of news articles in recent days about their participation in a VIP loan program that was run by Countrywide.

Dodd is chairman of the Senate Banking Committee and chief sponsor of the housing bill.

Reid said the nine Republican senators' concerns about needing time to review the bill were "totally valid." He said, "I hope they and their staffs look through this."

But he said the Senate will take up the bill on Thursday and Senate Republican Leader Mitch McConnell concurred.

"We are going to go forward ... Let the Senate work its will," McConnell, of Kentucky, said on the Senate floor.

The legislation would create a multibillion-dollar mortgage insurance fund that would backstop failing home loans. It would also offer billions of dollars in emergency housing relief and retool the regulator for Fannie Mae and Freddie Mac, the nation's two largest sources of mortgage finance.

Proponents say the bill could save 400,000 homeowners from foreclosure amid a deepening U.S. housing market crisis.

Asked about the letter, Reid spokesman Jim Manley said, "This is disgraceful. We have been trying to address this housing crisis for months, but Republicans have stood in the way every step along the way. If anyone had any doubt that Republicans are satisfied with the status quo ... this petty, partisan move should put those questions to rest."

The letter was signed by the following Republican senators: Jim DeMint of South Carolina, Tom Coburn and Jim Inhofe of Oklahoma, Saxby Chambliss of Georgia, Jim Bunning of Kentucky, David Vitter of Louisiana, Roger Wicker of Mississippi, Mike Enzi of Wyoming and John Ensign of Nevada.

"We request that you delay consideration until we have adequate time to read the bill and better understand the allegations and how much Countrywide will benefit from the bill," said the letter from the senators.

McConnell did not sign the letter. Nor did Republican Whip Jon Kyl of Arizona or several other senior Republicans.