WASHINGTON — The Senate is expected to pass a broad bipartisan housing package today, but observers say the measure faces a tougher road in the House, where it is likely to undergo significant changes.
Though the stimulus bill appeared to have won bipartisan support, consumer groups and some analysts saw it as relatively weak, and expect the House to craft its own version.
"It's likely you are going to see a very different bill emerge from the House. Whether the two bills can be conferenced becomes a big question," said Joshua Rosner, a managing director at the research firm Graham Fisher & Co. Inc.
The final Senate housing stimulus is more moderate than Democrats had hoped. It includes provisions that would raise to $550,000 the limit at which the Federal Housing Administration could insure loans, but would require a 3.5% down payment.
Other measures would allocate $4 billion for community development block grant funds to allow states to buy foreclosed properties, provide $100 million for pre-foreclosure counseling, and require enhanced mortgage disclosures from lenders.
But House Speaker Nancy Pelosi said last week that the Senate bill was insufficient.
"Hopefully, the balance will swing to being more in favor of the families who are in danger of losing their homes," she told reporters.
House Financial Services Committee Chairman Barney Frank, D-Mass., who is pushing a bill to allow the FHA to back mortgages worth more than the home after the lender takes a substantial haircut and held a hearing on the idea Wednesday (see
The House Ways and Means Committee also began consideration of a bill expected to be added to the stimulus packages that would make changes to the tax code in an effort to help struggling borrowers.
Consumer groups said they expect to favor the House version.
"We are hopeful it will address some of the issues at hand, because frankly this bill going through" the Senate "will do very little to stop the foreclosure crisis," said Josh Nassar, a lobbyist with the Center for Responsible Lending.
The White House sent a letter to Rep. Pelosi on Wednesday outlining the provisions it would support or oppose. It objected to the FHA rescue bill, a tax credit for the purchase of foreclosed homes and the creation of a permanent standard deduction for state and local property tax. "We must not prolong necessary corrections in the housing market, bail out lenders, or subsidize irresponsible borrowing and lending," wrote Keith Hennessey, director of the National Economic Council, and Karl Zinsmeister, assistant to the president for domestic policy.
