Congress, White House at odds over foreclosure relief

By Lisa Mascaro

Wednesday, Feb. 27, 2008 | 6:49 p.m.

WASHINGTON -- As Congress turns its attention next to the housing crisis, Democrats and the White House are heading toward another possible veto showdown.

President Bush has indicated he would reject Senate Majority Leader Harry Reid’s foreclosure prevention package, which includes housing counseling programs, funds to allow communities to buy foreclosed properties and the ability for local housing authorities to use bond funds to refinance subprime mortgages. (Republican Rep. Jon Porter has introduced a similar bill on bond funds in the House.)

However, the bill also contains a provision fiercely opposed by mortgage bankers that would allow bankruptcy judges to reset terms of some loans in foreclosure once homeowners file for bankruptcy. Bankers say this would increase interest rates for all borrowers.

Facing the veto threat, Reid said Wednesday he was unwilling to drop provisions to create a package the White House might support. “There’s no expectation of reaching any agreement with the president,” Reid said Wednesday. “I have tried for seven years… We’re going to do what we believe is best for the country.

“If we get 67 votes, great,” Reid continued, referring to the amount of votes he would need to override Bush’s opposition. “If not, the president will have to veto it.”

Later Wednesday, Reid dashed off a letter to Bush, saying Democrats had altered the bankruptcy provision to be more limited in scope, and urged the president to support the bill.