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WASHINGTON - The US Senate on Saturday approved an elaborate housing rescue plan designed to help thousands of homeowners avert foreclosure and bolster mortgage finance giants that have struggled amid a volatile housing market.
The Senate adopted the bill, which provides 300 billion dollars in federal guarantees to help refinance troubled mortgages, by a vote of 72-13, after the House of Representatives passed the bill on Wednesday.
President George W. Bush had dropped his earlier opposition and promised to sign the bill into law.
Before the vote, senators praised the bill as a product of rare bipartisan cooperation and said the legislation was vital to stem the fallout from a slumping housing sector.
"You're having the worst of all possible worlds. Wealth is declining, the source of wealth creation and costs are rising simultaneously," said Democrat Chris Dodd who chairs the Senate Committee on Banking, Housing and Urban Affairs.
"When we consider the role home equity has played in support of consumer spending, we see the danger a vicious downward cycle could create," Dodd said in a session carried live on C-SPAN television.
Citing figures on mushrooming home foreclosures, Dodd said: "Behind each one of these numbers I've cited here this morning there is a family, a mother, father, children trying to grow up facing unemployment, losing their homes, wondering what the future holds for them."
In addition to the federal guarantees for home loans, the bill provides for government credit and equity injections in Fannie Mae and Freddie Mac, the two mortgage lenders that underpin much of the housing market.
The bill also calls for some 3.9 billion dollars to help local governments buy and rehabilitate foreclosed homes.
Opponents, who tried to delay the vote and forced a rare weekend session, argued the plan would distort the market by rewarding "irresponsible" lenders and consumers and allow the government too big a role in the housing market.
A White House spokesman said the bill was long overdue, saying "it's good that the Democratic Congress has finally acted," Tony Fratto said in a statement.
Providing a financial lifeline for the government-sponsored Fannie Mae and Freddie Mac as well as more regulatory oversight "would contribute to confidence and stability in housing and financial markets," Fratto said.
Bush would back the bill even though he objected to some provisions assisting lenders, he said.
Citing "delays" by Democratic lawmakers in Congress and the urgent need for action, "President Bush will sign this bill when he receives it, despite our concerns with some provisions, including nearly four billion (dollars) to help lenders, not the homeowners this legislation is intended to serve."
- AFP /ls
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