WASHINGTON — The House on Thursday passed a massive homeowner-rescue plan to provide cheaper, government- backed mortgages to half a million debt-ridden borrowers and bolster an economy crippled by the housing crisis.
Defying veto threats from President Bush, the House approved the measure by a vote of 266-154, with 39 Republicans — mostly from areas suffering worst from housing woes — supporting it.
It would let the Federal Housing Administration take on up to $300 billion in new mortgages so that financially strapped borrowers facing foreclosure could refinance.
The plan by Rep. Barney Frank, D-Mass., is the centerpiece of a broader package of bills approved Thursday that Democrats say will prevent more foreclosures and help home owners and communities deal with the fallout from the mortgage meltdown.
“We are in a recession, and the major cause of that is the subprime crisis,” said Frank, the Financial Services Committee chairman. “Diminishing the number of foreclosures is in the interest not simply of those who will avoid foreclosure but people in their neighborhood, (in) the cities in which they are located and the whole economy.”
Proponents hope the package — awaiting action in the Senate — will serve as the basis for a broad bipartisan housing compromise that could satisfy both parties’ keen appetite for delivering election-year aid to anxious constituents.
But Bush’s veto warnings, bolstered by staunch GOP opposition, are clouding its prospects.
The House also passed 239-188 a bill to send $15 billion to states to buy and fix up foreclosed property.
