Senate Passes Housing Bill

After refusing to follow the House of Representatives in voting for an Obama backed housing bill that would allow bankruptcy judges to “cram down” residential mortgages, the Senate today passed its own housing bill.  The Senate bill attempts to ease the burden on homeowners facing foreclosure by allowing borrowers to refinance into lower cost government-backed mortgages.  Specifically, the Senate bill will expand the $300 billion “Hope for Homeowners” program which has so far been a resounding failure.  Since it began last year, the “Hope for Homeowners” program has enabled exactly 1 borrower (yes, 1) to complete a refinance.  Lawmakers hope to make the program available to more borrowers by loosening up the qualifications.

Opponents of the plan worry about the government’s increased role in taking on and insuring more and more risky loans.  The House has approved the Senate version of the bill, and it is expected to be signed into law very soon.