Dems' plans to aid homeowners have fragile prospects

Published: Saturday, May 10, 2008

WASHINGTON (AP) - Democrats' plans to help hundreds of thousands of homeowners struggling with rising subprime mortgage rates and plummeting house values could be sidetracked by President Bush's threatened veto and the opposition of many congressional Republicans.

Opponents of the plan say more prudent home buyers and renters shouldn't be called upon to bail out borrowers who gambled on ever-rising housing prices and lost.

"The American people don't want to make their neighbor's payment when they're having trouble making their own," said Rep. Randy Neugebauer, R-Lubbock.

The Democratic-controlled House on Thursday passed a homeowner rescue plan that would provide cheaper, government-backed mortgages to half a million debt-ridden borrowers and bolster an economy crippled by the housing crisis. The House approved the measure by a vote of 266-154, with 39 Republicans - mostly from areas suffering worst from housing woes - supporting it.

Defying veto threats, the House voted to let the Federal Housing Administration take on up to $300 billion in new mortgages so that financially strapped borrowers facing foreclosure could refinance.