Industry News

Senator envisions program to buy risky mortgages

Dodd wants housing programs in stimulus bill
Published on Jan 24, 2008

The chairman of the Senate Banking Committee wants to create a Federal Homeownership Preservation Corp. and provide it with up to $20 billion to purchase mortgages from lenders and allow homeowners to refinance into government-backed, fixed-rate mortgages. Sen. Chris Dodd, D-Conn., said the effort should be part of an economic stimulus bill being drafted by lawmakers, along with $10 billion in grants to local governments allowing them to buy and rehabilitate foreclosed homes The Bush administration has proposed injecting $140 billion to $150 billion into the economy through tax cuts, rebates and incentives, but the president's stimulus plan included no new initiatives targeted at housing. "The collapse of the housing market is a prime cause of the economic problems that we are facing today," Dodd wrote Senate Majority Leader Harry Reid, D-Nev., in a letter Tuesday. As proposed Jan. 18, the Bush administration's economic stimulus plan would rely largely on tax rebates of ...