No FHA Program in Foreclosure Bill?

When the Senate takes up a foreclosure prevention bill during the first week of April, the legislative package will not include a $300 billion Federal Housing Administration program to refinance distressed homeowners, according to Sen. Charles E. Schumer, D-N.Y. Before the Easter recess, Rep. Barney Frank, D-Mass., and Sen. Christopher J. Dodd, D-Conn., unveiled a legislative proposal that would help 1 million homeowners in "underwater" mortgages refinance into affordable FHA-insured mortgages. Sen. Dodd said he would like to include the FHA proposal in the foreclosure prevention bill. But it appears that Senate leaders have nixed it. Speaking on an ABC-TV news program, Sen. Schumer said the Frank-Dodd proposal has to be "done in a careful way, and we are not proposing that" as part of the foreclosure package. The New York senator stressed that the foreclosure bill will include "modest proposals" that provide for more housing counseling, increase mortgage revenue bonds, and create a net operating loss carry-back for homebuilders. Rep. Frank, the House Financial Services Committee chairman, has scheduled an April 9 hearing on the FHA refinancing proposal.