Senators Say Have Accord on Housing Rescue

[cal04]

http://www.nytimes.com/reuters/washington/politics-usa-housing-congress.html?_r=1&oref=slogin

Leaders of the Senate Banking Committee said on Thursday they have agreed to the underpinnings of a housing rescue plan that will create a federal backstop for failing loans.

"We feel very optimistic we can have a very significant bill, a bipartisan bill, to present to the rest of our colleagues on the floor of the United States Senate," committee Chairman Christopher Dodd told reporters Thursday evening after a full day of negotiations.

The plan would create a $300 billion mortgage insurance fund administered by the Federal Housing Administration and a new regulator for Fannie Mae and Freddie Mac, the two largest U.S. sources of mortgage finance.

Under a deal hammered out on Thursday, Fannie Mae and Freddie Mac will partly finance the mortgage insurance program through contributions to a new affordable housing fund, industry sources close to the talks said.

[xchrom]

1. it's important to note that this is

an insurance program -- that tax payers will never be liable for 300 billion.