WASHINGTON — A key House panel; on Thursday passed a measure to create an insurance fund that guarantees up to $300 billion in refinanced mortgages.
The House Financial Services Committee approved the bill 46-21, with nine Republicans joining all 37 Democrats on the panel to pass it.
Under the measure, sponsored by Committee Chairman Barney Frank (D-Mass.), borrowers with loans worth more than the value of their home would be able receive a newer, more affordable government-backed loan. Frank's office has estimated that the plan would cost between $3 billion and $6 billion.
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"It is my hope that this legislation will restore some stability to the housing market, put liquidity back in the market, and not interfere with the market, but help preserve it," Frank said at the committee meeting.
CUNA and NAFCU had both backed the measure.
On Wednesday, the Federal Deposit Insurance Corporation unveiled a proposal under which homeowners could receive government loans to pay down as much as 20% of their principal.
The Senate Banking Committee is also working on legislation to deal with the foreclosure crisis.
The vote by the House panel was the second major housing bill it passed recently. Last week, it approved a measure to make $15 billion in loans and grants available to states and cities to deal with problems caused by the foreclosure crisis. Some of the funds could be used by governments to purchase foreclosed properties.
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