Americans for Fairness in Lending

CQ Today

The House passed a bill Thursday aimed at easing the foreclosure burden on cities and states, while a much larger housing package was expected to move later in the day.

Sponsored by Maxine Waters , D-Calif., the first bill would establish a $15 billion loan and grant program to help states purchase and rehabilitate owner-occupied foreclosed properties. The House passed the measure 239-188.

Before that, lawmakers voted 391-33 to adopt an amendment to clarify that illegal immigrants would not be eligible for financial assistance under the bill.

Rep. John Shadegg , R-Ariz., offered a motion to recommit the bill that sought to add language to bar sex offenders, drug dealers and perpetrators of mortgage fraud from buying homes made available under the program. The motion, rejected 210-216, also would have given preference to veterans for receiving grants and loans under the bill.

House Financial Services Chairman Barney Frank , D-Mass., said an amendment adopted Wednesday added priority treatment for veterans and members of the armed forces.

The Bush administration has threatened to veto the bill, saying it “would constitute a costly bailout for lenders and speculators and would delay the economic recovery it purports to advance.”

The White House says the principal beneficiaries would be private lenders, who are now the owners of the vacant or foreclosed properties, instead of struggling homeowners.

Lawmakers then moved to the larger housing package that the Bush administration also has threatened to veto.

The legislation combines several major bills, including a regulatory overhaul of mortgage finance giants Fannie Mae and Freddie Mac and a modernization of the Federal Housing Administration.

The bill also includes a major expansion of the FHA’s insurance programs that would relax agency lending standards so it could back refinanced loans for borrowers struggling to make their payments.