Industry NewsMortgage

$300 billion FHA refi plan headed for House vote

FDIC touts 'complementary' program for troubled borrowers

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A plan to allow the Federal Housing Administration to help refinance up to 2 million troubled mortgages is headed for a vote in the House of Representatives, after receiving limited bipartisan support in a committee vote Thursday. Legislation that would enact Rep. Barney Frank's $300 billion FHA expansion plan was approved by the House Financial Services Committee in a 46-21 vote, with the full House expected to weigh in next week. Although the bill is opposed by the Bush administration, 10 Republicans on the committee joined Democrats in supporting the plan, originally put forward in March by Frank, D-Mass. While some critics have derided Frank's plan as a bailout, backers say lenders would have to agree to substantial principal write-downs to participate in the program. Participating lenders would be paid no more than 85 percent of a property's current appraised value when a mortgage is refinanced into an FHA-backed loan. Only owner-occupied homes with mortgages originat...