Industry News

Senator envisions program to buy risky mortgages

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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 ...