WASHINGTON — Spurred by a groundswell of bad news in the mortgage and credit markets and hearing from constituents during a two-week break, the Senate stepped up efforts last week on housing legislation to help distressed homeowners.

A bipartisan effort saw Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) agreeing on aspects of a broad package of legislation called the Foreclosure Prevention Act of 2008 (S. 2636). The plan offers $4 billion in grants to local governments to buy and refurbish foreclosed homes, provides $10 billion for states to issue tax free bonds to be used to refinance subprime mortgages and a $7,000 tax credit for people buying new homes or properties in foreclosure.

"It is a robust package," Reid said. "This is good news for the American people." The Federal Reserve's engineered bailout of Bear Stearns was mentioned several times during the debate, making the message clear that Congress needs to act on behalf of homeowners.