WASHINGTON — The Senate whisked long-debated legislation intended to prop up the housing market within reach of the finish line Saturday, with a vote 72 to 13.
President Bush is expected to sign the bill soon.
Lawmakers said they were pleased it was finally finished.
"This has been a long and arduous process," said Senate Banking Committee Chairman Chris Dodd during debate in the Senate Saturday. "We continued to work... and improve the legislation so that it would more thoroughly address the growing foreclosure and financial crisis... This act is coming none too soon."
The legislation has a long history. The House took action on the base of the bill, which would create a stronger regulator for the government-sponsored enterprises and the Federal Home Loan Banks and expand the Federal Housing Administration, in separate measures last year.
But as foreclosures continued to climb, tugging down housing prices and sending rippling effects through the broader economy, lawmakers sought more aggressive solutions.
By May the two chambers began volleying back and forth a broader package of reforms. They tacked on a foreclosure prevention program that would let struggling borrowers who owe more on their mortgages than what their homes are worth reduce their principals and refinance into cheaper 30-year fixed-rate mortgages insured by FHA.
As the two chambers were embroiled in debating technical differences between the two bills, Treasury Secretary Henry Paulson made a pitch for broad new powers for his agency to backstop Fannie Mae and Freddie Mac on July 13 with a consultative role for the Federal Reserve Board.
The Treasury powers would let it extend a limitless line of credit or invest in the GSEs directly to prevent collapse, but that authority and the Fed's would expire at the end of 2009.
After weeks of intense discussions between banking leaders from the two chambers and with Treasury, the House passed a bill that encompassed a final compromise on Wednesday 272 to 152.
During debate on Saturday Sen. Richard Shelby, the Senate Banking Committee's top Republican referenced the tense atmosphere that colored the negotiations over the bill.
"It was no surprise to me that the secretary asked for such... authority," said the Alabama Republican on the Senate floor, saying he knew the GSEs were "sitting on a financial powder keg."
"It's unfortunate that it took a near collapse of Freddie Mac and Fannie Mae to convince a number of my colleagues that these entities do pose a systemic risk... Unfortunately over the years my quest for a stronger regulator were not only ignored but they were rebuffed."