A rescue bill, designed to prop up America’s battered housing market, has been approved by the US Senate. A $300bn rescue fund is created by the new law, in order to help thousands of homeowners to get cheaper loans.
It might also be used to bail out the struggling mortgage giants Freddie Mac and Fannie Mae, which own or guarantee around half the nation’s mortgage debt.
Approved in a very short time, the bill is expected to be signed into law next week by president Bush.
The bill will help hundreds of thousands of Americans, trapped by mortgages they can no longer afford, who will be offered the chance to refinance with state-backed, fixed rate loans, says the BBC’s Jack Izzard in Washington.
Serious problems are being caused to the wider US economy, by the housing crisis. In the second quarter of 2008, almost 740 000 US homes entered the foreclosure process, according to research firm RealtyTrac.
Nevada, California, Florida and Arizona were the worst-hit areas, as they have seen the biggest house price rises during the boom years, as well as the largest volume of sub-prime lending.
The bill will cost US taxpayers billions and query the wisdom of bailing out irresponsible homeowners or unscrupulous lenders, say its Republican critics.
Initially, over a provision for $3.9bn in community grants to buy up and repair repossessed homes, George W. Bush had threatened to veto the bill.