Ahead of the scheduled markup of a housing package by the Senate Banking Committee this Tuesday, President Bush reiterated his stance that he would veto any housing package deemed a "bail out" of irresponsible borrowers or lenders. After meeting with Treasury Secretary Hank Paulson, Bush said Monday that he was committed to housing programs that "help people refinance and help people get the financial help necessary to stay in homes."
"Our policy in this administration is [that] laws shouldn't bail out lenders, laws shouldn't help speculators, the government ought to be helping creditworthy people stay in their homes," he said in remarks delivered at a White House press conference Monday afternoon.
The President lauded Paulson's efforts to develop the HOPE NOW alliance and its associated loan modification programs, and said that he supported Congress' efforts to push through legislation that would reform oversight of government-sponsored entities Fannie Mae (FNM)
and Freddie Mac (FRE)
"We look forward to working with Congress to get a good piece of legislation to my desk that helps our fellow citizens, and helps us get through this housing issue," Bush said. He did not delve into specifics of the current housing bill under consideration by Senate leaders, having threatened in recent weeks to veto the package over concerns tied to a proposed $300 billion expansion of the FHA-insured mortgage program.
An agreement close?
It's yet possible that the President will agree to sign an amended housing package, sources told Housing Wire yesterday, suggesting that the administration may be softening its stance towards the bill ahead of an expected bi-partisan compromise negotiated last week.
Primary Republican opposition to the proposal stemmed from perceived taxpayer funding of the proposed FHA expansion, our sources suggested; restructuring the expansion bill to push the costs more directly onto the GSEs, as numerous media outlets have reported over the weekend, may solve some of those concerns.
"Senator Shelby and I are very close to reaching an agreement on this important piece of legislation, and are working with each other and other members of the Committee to resolve the few differences that remain," said Banking Committee Chairman Christopher Dodd (D-CT). Dodd has been at loggerheads with Sen. Richard Shelby (R-AL), the ranking Republican on the Senate Banking Committee, whose opposition to the housing package was seen as the primary roadblock to any Senate passage.
Dodd characterized as "optimistic" the chances that his committee would successfully mark up and send a bill to the Senate floor for consideration this week.
The agreement between Dodd and Shelby allegedly includes subsidizing the expansion of FHA lending using an affordable housing fund to be financed by both Fannie Mae and Freddie Mac on a sliding scale that would reduce over time, Bloomberg News reported on Friday
Disclosure: The author held no positions in FNM or FRE when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.