US

Rescue bill for homeowners and mortgage companies

Article published on the 2008-07-24 Latest update 2008-07-24 08:54 TU

A foreclosure sale sign in front of a house in Falls Church, Virginia
(Photo: Reuters)

The US House of Representatives has passed a plan which provides aid to homeowners facing foreclosure and protects the country's two largest mortgage finance companies from collapse. Over a million people have lost their homes in the worst housing crisis since the Great Depression.

The legislation was passed Wednesday by 272 votes to 152. The bill will now be submitted to the Senate for approval before going to President George Bush for his signature.  

The plan offers aid to homeowners facing foreclosure and seeks to support mortgage finance giants Fannie Mae and Freddie Mac.

It will provide 3.9 billion dollars (2.5 billion euros) to help local governments buy and renovate homes whose owners have been unable to keep up mortgage payments. 

Hundreds of thousands of homeowners have seen the value of their properties decline and face mortgages they can no longer afford.  The plan allows them to refinance their mortages with fixed-term rates, backed by the Federal Housing Administration.

The White House announced just before the vote that President George Bush would sign the bill. He had initially threatened to veto it because he opposes the grants to local government.