Senate to revisit stalled mortgage bill

WASHINGTON - When the Senate returns Monday from its July 4th recess, it will try again to pass a stalled package of mortgage relief and reform.

"We should be able to get it done," said Sen. Johnny Isakson, the Georgia Republican who wrote a provision for tax credits to stimulate home purchases. "Overall, it's a good piece of legislation."

Supporters say the landmark legislation would help end the foreclosure crisis, stabilize the battered housing industry and help prevent future mortgage meltdowns. It would:

* Overhaul regulation of mortgage finance giants Fannie Mae and Freddie Mac.

* Modernize the Federal Housing Administration.

* Offer a $300 billion FHA insurance program to help struggling borrowers refinance home loans headed for default.

* Provide government grants and tax credits to help homeowners.

On June 24, the Senate voted 83-9 in favor of ending debate and moving to the final vote, suggesting the bill has broad bipartisan support.

The House passed its version of housing legislation in May.

During those House-Senate negotiations, a number of provisions could be cut or tweaked. For example, the Senate bill would raise the size of single-family mortgage loans that Fannie Mae and Freddie Mac can acquire or guarantee to $625,000. Previously, the limit was $417,000, but earlier this year, Congress temporarily hiked that limit to $730,000 to make it easier for more people to buy houses.

Unless Congress acts again, the limit will revert to $417,000 at the end of the year.

But House Democrats from areas with expensive housing want to keep the new $730,000 limit. They say that in pricey places like New York and San Francisco, middle-class families often have to pay more than $625,000 for a typical home, so the Senate's figure is too low for them. *