A housing package, long in the making, may be derailed once more. On Wednesday, Mich McConnell (Senate minority leader R-KY) announced that he and his fellow Senate minority member, Harry Reid (D-NV), had come to a general accord and would allow the bill to probably pass during that same week. However, the package was then stalled by another senator who wanted the bill to include energy tax breaks.

The package is set to install a new government assisted program to help troubled borrowers. It would also affect how the mortgage market is operated and the rules of usage. Another important note, is that it includes measures to create activity in the market.

Several senators were in talks with Barney Frank (House Financial Services Chairman, D-MA) and Nancy Pelosi (House Speaker, D-CA) to fix the differences between the Senate version of the package and the foreclosure prevention which the House passed last May. It is assumed that once all the details are finally ironed out, that the bill would be able to pass the House as well, but it is still in doubt as to whether the bill can be presented to President Bush by the hopeful July 4^th deadline that was made.

In its current state, it is unlikely the bill would pass as the White House has alleged that the President would veto it as is. In order to gain approval, lawmakers will probably eliminate a provision for $4 billion in aid to help states buy foreclosed properties, as the White House feels that is more of a lender benefit then homeowners.

A key part of the bill that also calls for most attention is one that would let the Federal Housing Admin., insure up to $3 billion in loans for troubled borrowers if lenders would figure loan balances for below the appraisal value of the borrowers´ homes. This program would be voluntary for lenders and borrowers and would be paid by the premiums paid by borrowers and from fees from Fannie and Freddie, two of our giant government maintained conglomerates for mortgages.

Those critical of the above part of the plan, feel that lenders would probably just use the program for their loans that are almost certain to go to foreclosure, which according to the Congressional Budget Office, would net $680 million or 1% of the total amounts guaranteed, as a default loss.