GOP aims to slow housing rescue bill

WASHINGTON (AP) — Conservative Republicans in the Senate were seeking to slow the completion of an election-year housing rescue designed to help hundreds of thousands of homeowners avoid foreclosure and boost lawmakers’ standing with voters.

Sen. Tom Coburn, R-Okla., said Wednesday he was working on ways to stop the bill, which he said would “reward stupidity on the part of people who bought homes they couldn’t afford.”

Amid rising foreclosures and growing public anxiety about the sagging economy, Democrats and many Republicans were eager to push the bill through the Senate and could begin voting on it as early as today. They hoped to send the bill to President Bush before Congress breaks for a weeklong July 4th vacation.

However, a group of conservative Republicans, including Coburn, threatened to block the measure in light of allegations that Banking Committee Chairman Chris Dodd, D-Conn., one of its architects, and Budget Committee Chairman Kent Conrad, D-N.D., received preferential mortgages from Countrywide Financial Corp. through a special program for friends of the embattled firm’s CEO.

Nine conservative GOP senators wrote to Senate Majority Leader Harry Reid, D-Nev., requesting that he delay consideration of the housing measure until they could review it and “better understand the allegations and how much Countrywide will benefit from the bill.”

The centerpiece of the package is a foreclosure rescue program that would have the Federal Housing Administration back $300 billion in new, cheaper mortgages for distressed homeowners who otherwise would be considered too financially risky to qualify for government-insured, fixed-rate loans.

Borrowers would be eligible if their mortgage holders were willing to take a substantial loss and allow them to refinance, and would have to share with the government a portion of any profits they made from selling or refinancing their properties.