Lawmakers Vent Frustration on Housing

With proposed legislative fixes to the housing crisis stalled, the head of a House committee vented frustration on Thursday as the Bush administration advanced a plan to assist homeowners threatened by mortgage rates scheduled to rise.

A bill to expand authority for the Federal Housing Administration, a Depression-era agency that insures loans made to low-income borrowers passed the House in September with broad bipartisan support. So has another that would overhaul oversight of government-sponsored finance companies Fannie Mae and Freddie Mac, giving the companies the ability to finance larger mortgages, among other provisions.

Both pieces of legislation are going nowhere fast in the Senate.

Rep. Barney Frank, D-Mass., and chair of the House Financial Services Committee, said at a hearing that "the increasing inability of the United States Senate to function is becoming a threat to governance."

Echoing Frank's comments, Rep Judy Biggert, R-Il, said "the House did its work and the Senate sits on it, again."

The Bush administration also has been critical of the Senate's lack of progress on these bills. "Congress has not sent me a single bill to help homeowners," President Bush said Thursday, upon unveiling a plan Thursday that would allow some at-risk borrowers to freeze their interest rate for five years.

The plan aims to prevent foreclosures and limit damage to the broader economy.

Sheila Bair, chairman of the Federal Deposit Insurance Corp., said in remarks prepared for the hearing that that she was optimistic about the Bush plan.

"We're just getting into the thick of the problem," she said, noting that 1.7 million adjustable-rate subprime mortgages are projected to reset to higher rates this year and next. Mortgage modifications, she said, would benefit both borrowers and investors, who would avoid the cost of foreclosure.

Still, consumer advocates say the Bush adminstration's plan doesn't go far enough to help troubled borrowers and are worried that it may deflate momentum for other proposals in Congress _ such as reforming mortgage lending laws and altering the bankruptcy code to allow home loans to be reduced by a bankruptcy law.

Josh Nassar, vice president of federal affairs at the Center for Responsible Lending, a consumer group, said the Bush plan doesn't go far enough. "There's still a need to help borrowers who have already fallen behind and who are in danger of entering foreclosure."