Americans for Fairness in Lending

The New York Times

WASHINGTON — On the eve of a House floor debate on a plan to help homeowners in danger of foreclosure, the Bush administration said on Tuesday that it opposed the measure and that White House advisers would urge the president to veto it.

The bill, championed by Representative Barney Frank, Democrat of Massachusetts, is expected to be approved Wednesday or Thursday. It would expand access to federally insured mortgages to help troubled homeowners refinance their loans.

The administration, in a statement of opposition on Tuesday evening, called the bill “overly burdensome and prescriptive” and said it would “force” the Federal Housing Administration and taxpayers “to take on excessive risk.”

The Congressional Budget Office estimated that the bill would generate 500,000 refinanced mortgages over the next five years at a cost to taxpayers of about $2.7 billion. Democrats had previously predicted that more than a million owners would get help.

Proponents of the measure say it would bolster the battered housing market by giving lenders a way to limit their losses. Under the plan, lenders would have to reduce the principal balance of loans before borrowers could refinance with a federal guaranty.

But the Bush administration has said it prefers a more limited expansion of federally insured mortgages, which it said could be accomplished by the Federal Housing Administration without new legislation.

Mr. Frank, the chairman of the Financial Services Committee, has been laboring to reach a deal with the Treasury secretary, Henry M. Paulson Jr., and had adjusted the bill several times in response to administration concerns.

In an interview, Mr. Frank said that a veto would be a sign that the president was abandoning efforts to help homeowners.

“I think it would be a declaration that he’s stopped trying to govern,” Mr. Frank said, as if the president were saying: “ ‘I’m through governing, let’s just yell at each other for the rest of the year.’ ”

Because the bill still needs to be considered by the Senate, Mr. Frank and other Democrats said they viewed the White House statement as a signal to Senate Republicans to oppose the measure.

And Democrats said they would immediately seize on such opposition to portray the Republicans, already on the defensive in this year’s Congressional elections, as being slow to aid homeowners even as they backed help for Bear Stearns, the investment bank.

“The White House may in fact be prepared to hand us the gift that keeps on giving all the way through the November elections,” said Jim Manley, a spokesman for the majority leader, Senator Harry Reid of Nevada.

Mr. Frank’s bill is part of a package that also includes two major housing measures that the White House has been demanding for months: an overhaul of the Federal Housing Administration and tighter regulation for the government-sponsored lenders Fannie Mae and Freddie Mac.

In its statement of opposition, the administration said it viewed the inclusion of those provisions as “largely symbolic” and called on Congress to pass those bills as independent measures. The administration also said it strongly opposed an array of tax provisions that are included in the bills.