hmm... U.S. Housing, Bank Regulators to Meet on Housing Bill (Update1)
By Alison Vekshin
July 27 (Bloomberg) -- U.S. housing and banking regulators have been summoned to Capitol Hill this week in a bid to speed enactment of sweeping housing legislation lawmakers passed this weekend, Senator Christopher Dodd said.
Dodd, a Connecticut Democrat, said he is ``terribly disappointed'' by remarks he attributed to Housing and Urban Development Secretary Steve Preston that it would take as long as a year to implement regulations to provide help for almost 400,000 homeowners at risk of foreclosure. A HUD spokesman said Preston didn't make the comment Dodd mentioned.
``We wrote this legislation specifically to bypass the normal rulemaking process,'' Dodd, chairman of the Senate Banking Committee, said at a news conference yesterday following the 72-13 vote in a rare Saturday Senate session.
Congress passed the legislation to stem foreclosures and prop up Fannie Mae and Freddie Mac, its most sweeping effort to halt a rise in foreclosures in the biggest housing recession since the Depression. President George W. Bush will sign the measure into law, putting aside his objections to some provisions, a spokesman said.
Dodd said he has asked to meet with the leaders of HUD, the Federal Reserve, the Federal Deposit Insurance Corp. and Treasury Department in his Washington office July 29 ``to tell me why they can't begin immediately to get this bill working.''
HUD spokesman Stephen O'Halloran said Preston didn't make the comments that Dodd cited at the news conference, and he said the agency is committed to completing the work.
`Working Diligently'
``Despite that Congress provided no immediate funding for us to implement the entire bill, even though we specifically requested they do so, we will be working diligently to stand up the new refinance program,'' O'Halloran said. ``Our goal is to make this a seamless transition and implementation.''
The foreclosure-prevention measure, unveiled in March, sped through Congress after Treasury Secretary Henry Paulson asked lawmakers to tuck in a provision that would let him inject capital into Washington-based Fannie Mae and McLean, Virginia- based Freddie Mac through government loans and investments.
Paulson lobbied for the proposal, which creates a tough regulator for the two government-sponsored enterprises, and persuaded Bush to drop veto threats.
`Utmost Importance'
``It is of the utmost importance to our market and economic stability that the GSE portions of this bill become law,'' Paulson said in a statement. ``These components are orders of magnitude more important to turning the corner on the housing correction.''
Senate Majority Leader Harry Reid said the bill will be sent to the White House tomorrow. The president will sign the measure without a formal ceremony, a White House spokesman said.
``Oversight of the housing government-sponsored enterprises and the new temporary authorities requested by Secretary Pauslon are urgently needed now, and they'll contribute to confidence and stability in housing and financial markets,'' White House spokesman Tony Fratto said.
The legislation increases the loan limit at Fannie Mae and Freddie Mac to $625,500 from $417,000 in high-cost areas. It raises the nation's debt limit to $10.6 trillion from $9.816 trillion to accommodate the Paulson plan.
FHA Program
The centerpiece of the legislation is a new program at the Federal Housing Administration, an agency of the U.S. Department of Housing and Urban Development, to insure up to $300 billion in refinanced 30-year fixed loans for about 400,000 borrowers struggling with their monthly payments after loan holders agree to cut their mortgage balance.
The measure offers $15 billion in tax breaks, including provisions offering the equivalent of interest-free loans worth up to $7,500 for first-time homebuyers. States may offer an additional $11 billion in mortgage revenue bonds to refinance subprime loans.
Other provisions give states $4 billion to buy up foreclosed properties, create a new affordable housing program financed by Fannie Mae and Freddie Mac and offer $180 million for mortgage counseling programs.
To contact the reporter on this story: Alison Vekshin in Washington at avekshin@bloomberg.net;
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