Industry NewsMortgage

Senate leaders compromise on FHA expansion

Dodd, Shelby see Fannie and Freddie covering losses
Published on May 20, 2008

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by CareyBot

Senate Banking Committee leaders agreed to a multibillion-dollar expansion of FHA loan guarantee programs Monday, saying Fannie Mae and Freddie Mac would cover losses rather than taxpayers.

The Congressional Budget Office has estimated that taxpayers might be liable to up to $1.7 billion in losses if the program -- approved May 8 in a 266-154 House vote -- helps 500,000 borrowers over the next five years.