Housing Bill Clears Final Senate Hurdle

A massive package of housing legislation that President George W. Bush has pledged to sign into law cleared its final procedural hurdle in the Senate on Friday, leaving only a final Senate vote before it's enacted.

Senate lawmakers voted 80-13 to limit debate on the measure, leaving a maximum of 30 hours before the chamber must vote on the wide-ranging legislation.

The solid vote in favor of the procedural motion suggests the legislation will receive overwhelming and bipartisan support when lawmakers vote to pass the measure, likely to occur Saturday morning.

If passed by the Senate, the combination of tax relief for homeowners, a new regulator for Fannie Mae and Freddie Mac, and a $300 billion program to avert foreclosures, would be sent to the President for his signature. The White House earlier this week backtracked on a potential veto of the bill, instead saying Mr. Bush would sign the measure.

Lawmakers have described the bill as the "most important piece of housing legislation in a generation." Intended to stabilize the still faltering housing market, it includes long-sought reforms for the Federal Housing Administration, millions in funding for counseling struggling homeowners, and nearly $4 billion in grants to cities and states to buy and rehabilitate foreclosed homes.

Also included is a dramatic Treasury Department proposal to help restore confidence in Fannie Mae and Freddie Mac, which have been the focus of growing scrutiny about their solvency and capital levels as the housing market continues to deteriorate.

The plan would increase Fannie Mae and Freddie Mac's $2.25 billion lines of credit with the Treasury, as well as allow the government to potentially buy an equity stake in the firms. It would also give the Federal Reserve a consultative role over the regulation of the firms, particularly the capital they must hold.

Treasury Secretary Henry Paulson and lawmakers have said there is no immediate need or plan to take advantage of the Fannie and Freddie backstop, but the bill sets few limits on the help that the federal government could provide if necessary. Any help would be subject to the federal debt limit, which lawmakers are voting to increase to $10.6 trillion as part of the legislation.

As Congress moves towards taking its most aggressive step yet to address housing woes, foreclosure data released Friday suggests the housing situation continues to worsen. Industry tracking firm RealtyTrac said the number of properties with some sort of foreclosure action has climbed for eight straight quarter, with 739,714 homes receiving a foreclosure filing during the second quarter of 2008.

"Forty-eight of 50 states and 95 out of the nation's 100 largest metro areas experienced year-over-year increases in foreclosure activity in the second quarter," RealtyTrac CEO James Saccacio said in a press release.