WASHINGTON (AP) -- A mortgage rescue to help hundreds of thousands of struggling homeowners avoid foreclosure and get more affordable, safer loans passed the Senate overwhelmingly Friday, but it faces a bumpy road amid continuing turmoil in the housing market.
The 63-5 vote reflected a keen interest by Democrats and Republicans to send election-year help to distressed homeowners with economic issues topping voters' concerns.
The plan lets homeowners buckling under mortgage payments they can't afford keep their homes and get more affordable mortgages backed by the Federal Housing Administration. Banks that agreed to take substantial losses on those distressed loans could avoid costly foreclosures and be assured of recovering at least some money.
The new program would let the FHA insure as much as $300 billion in new mortgages, helping an estimated 400,000 homeowners.
It still faces challenges, however, with the House planning to rewrite key details and the White House threatening a veto without major changes.
WASHINGTON (AP) -- Wall Street and Washington wrestled Friday with how to shore up mortgage giants Fannie Mae and Freddie Mac, two troubled pillars of the economy whose failure would deal a devastating blow to the already crippled housing market.
As investors grew more convinced that only some type of government bailout could rescue the firms, Treasury Secretary Henry Paulson said the focus was to support the pair "in their current form" without a takeover.
The government was considering giving Fannie and Freddie access to the Fed's emergency lending program as one option to prop up the firms, said Sen. Christopher Dodd, D-Conn., citing talks with Fed Chairman Ben Bernanke and Paulson.
A Fed spokeswoman said the central bank had not talked with Fannie and Freddie about the emergency lending program.
Both companies issued statements late Friday calling their financial positions solid. Freddie Mac said it did not see an immediate need to raise fresh money, and said other options included cutting its annual shareholder dividend, which costs $650 million a year.
BEIRUT, Lebanon (AP) -- Lebanon's prime minister has formed a national unity Cabinet in which Hezbollah and its allies have veto power over government decisions.
Prime Minister Fuad Saniora had been struggling to form a government since former army chief Gen. Michel Suleiman was elected president in May. Saniora announced the Cabinet formation Friday in Beirut.
Hezbollah's veto power was part of an Arab League-brokered deal to achieve compromise between the U.S. and Western-backed parliamentary majority and Hezbollah-led opposition.