US Senate approves $300 bn to help homeowners (Lead, changing dateline)

July 12th, 2008 - 12:38 pm ICT by IANS  

Washington, July 12 (DPA) The US Senate has approved a bill to protect homeowners tied to Fannie Mae and Freddie Mac in the wake of the smoldering real estate and credit crisis. The legislation, approved by 63-5 votes, offers an estimated 400,000 struggling homeowners help to avoid foreclosure by refinancing their subprime mortgages into fixed-rate loans backed by the government, Bloomberg financial news service said.

The bill also offers tax incentives to prospective homebuyers and sets aside $4 billion to help communities buy foreclosed properties.

Together the government backers of real estate mortgages own or guarantee about half of all US home loans, worth some $5 trillion.

Now a similar version of the bill must go before the US House of Representatives for consideration within the next two weeks, before a final draft is presented for President George W Bush to consider.

Although previously threatening a veto, the Bush administration has indicated its willingness to compromise.

However, the White House has argued that setting aside cash for communities to buy foreclosed property, would benefit lenders who own vacated property rather than help individuals keep their homes.

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