WASHINGTON - Looking to help homeowners avoid foreclosure, the Democratic-controlled House on Tuesday moved toward expanding federal backing of mortgages well beyond limits favored by the Bush administration.
The House bill would allow the Federal Housing Administration, which insures mortgages for low- and middle-income borrowers, to back refinanced loans for tens of thousands of borrowers who are delinquent on payments because their mortgages are resetting to sharply higher rates from low initial "teaser" levels.
"The American dream is in peril for many families in this country as foreclosures rise and dreams shatter," Rep. Betty Sutton, a Democrat from Ohio, a state particularly hard-hit by the default wave, declared in House debate on the measure.
She called the legislation, which backers say could help an estimated 250,000 families, "a bold step forward on what is going to be a long road to fix this broken system."
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