WASHINGTON — At press time, the House was close to passing a measure that would make government mortgages more widely available, though President Bush has threatened to veto the measure because it is too expensive.
Under the measure, sponsored by House Financial Services 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.
The Congressional Budget Office has estimated the measure, which Bush said rewards speculators and lenders more than homeowners, would finance about 500,000 mortgages at a cost of $2.7 billion.
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CUNA and NAFCU support the measure.
NAFCU President Fred Becker wrote Frank on Tuesday that the House should also include provisions to reform the Federal Housing Administration and changes in the regulatory oversight of Fannie Mae and Freddie Mac.
In March, CUNA President Dan Mica said the provision in Frank's measure to use Federal Housing Administration loan guarantees as incentive for lenders to accept mortgage write-downs "is an appropriate approach that will benefit many consumers."
CUNA has expressed support for FHA reform and changes to the regulation of Fannie Mae and Freddie Mac, but is more focused on credit union regulatory reform, said CUNA Vice President of Communications Pat Keefe.
The Bush administration wants Congress to pass the FHA and Fannie-Freddie bills–which they like–individually, rather than as a package because they don't want like the proposals on mortgages. The administration has supported a smaller package, including a proposal to make government loans available to homeowners to pay down as much as 20% of their principal
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