Housing Compromise to Hit Floor Thursday

Posted April 2, 2008 at 6:36pm

Senate leaders reached a rare bipartisan compromise late Wednesday on a bill to contain housing troubles stemming from the subprime mortgage crisis. The final product, hammered together by Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) and ranking member Richard Shelby (R-Ala.) avoided some of the more controversial provisions being floated earlier in the day. The Senate is expected to take it up Thursday. Dodd said the foreclosure bill “is not a complete product” but is a beginning framework for lawmakers to continue their discussion. During the negotiations, bankruptcy language supported by Senate Majority Whip Dick Durbin (D-Ill.) was dropped. That language would have allowed bankruptcy judges to renegotiate the terms of a home loan and may be offered as an amendment in floor debate Thursday. In the name of compromise, Dodd had to forfeit his language that would have allowed the Federal Housing Authority to offer $4 billion in aid to homeowners that are unable to make mortgage payments, according to one Democratic aide. The provision would also have given a discounted refinance loan to homeowners to prevent foreclosure. Republicans also had to scale back some of their plans. Sen. Johnny Isakson (Ga.) wanted to engineer $15,000 in tax cuts to homeowners of foreclosed homes, but negotiators cut that back to $7,000. Citing a Tuesday conference with Senate leaders, Dodd stressed the necessity of producing a bipartisan bill to avoid inaction. “As I mentioned yesterday, inaction was not an option. Failure is not an option,” Dodd said. “We looked for areas where we could agree on.”