U.S. Senate Panel Reaches Agreement on Anti-Foreclosure Measure

The U.S. Senate Banking Committee tentatively agreed on an anti-foreclosure measure that would have Fannie Mae and Freddie Mac foot part of the bill for a federal program to insure mortgages for struggling borrowers.

In other words, LET THE BAILOUTS BEGIN!!!

Your tax dollars will now be used to guarantee stupid loans taken out by stupid people.

“We’re not quite there yet,” Senator Christopher Dodd, the Connecticut Democrat who heads the Banking Committee, told reporters yesterday. “We’re working at it. We’ve got a couple of outstanding issues. But we’re very close to this.”

In other words, we have to find a way to give away more tax dollars before we can pass this bill.

The measure would overhaul regulation of Fannie Mae and Freddie Mac and allow borrowers at risk of foreclosure to refinance their homes with government-backed mortgages through the Federal Housing Administration. Dodd and Senator Richard Shelby of Alabama, the banking panel’s ranking Republican, agreed to subsidize the FHA program using an affordable housing fund to be financed by the two government-sponsored enterprises.

The socialization of the mortgage industry. How very Hugo Chavezish of our Congress.

Dodd proposed letting borrowers with hybrid adjustable-rate mortgages refinance into fixed-rate loans guaranteed by the FHA. Lenders would be protected against defaults on the refinanced mortgages in exchange for agreeing to absorb some of the costs by writing down a portion of the loan balance.

Like I said, let the bailouts begin.

Shelby and other Republicans opposed Dodd’s proposal, saying it would reward irresponsible lenders and borrowers at taxpayers’ expense. The White House singled out a similar provision in the House bill in its veto threat last week.

“I do not think the people back in Kentucky sent me to Washington to bail out speculators, Wall Street executives and people who drained the equity in their homes to buy flat-screen televisions and new cars,” said Senator Jim Bunning, a Kentucky Republican.

Jim Bunning for President.