A bill that would give authorization to the FHA guaranteeing up to $300 billion in new mortgages from government-approved lenders was approved 42 to 21 on Thursday. The House will consider the measure next week. The program is meant to help over 1.5 million homeowners facing foreclosure. Representative Barney Frank related that the borrowers facing foreclosure due to the housing market and credit crises deserve the help, even though many of them signed for loans that they couldn’t afford. “There are people who made loans that should not have been made; there are some people that were wrong to take the loans out, some wrong to make the loans. If nothing happens and all those loans go under foreclosure, the economy suffers,” he said.

Democrats of the House Financial Services Committee managed to defeat Republican amendments to the proposal. GOP amendments wanted to exclude those with particularly bad credit, limited to low and middle income borrowers, and would eliminate the requirement that lenders accept losses.

Republicans are having a difficult time accepting Frank’s bill. “It’s not fair to ask the American taxpayer to insure loans to the riskiest borrowers, who may not be able to pay their mortgages no matter what,” J. Gresham Barrett, R-South Carolina, told The Associated Press. President Bush also opposes the bill because he feels it’s a bailout.

Hopefully, Washington will get around to approving some sort of bill to help homeowners out of this severe housing market that threatens our economy like that in 1929.

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