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US House approves foreclosure bill with presidential support

[JURIST] The US House of Representatives on Wednesday passed the Foreclosure Prevention Act of 2008 [HR 3221 materials; House debate video, flash], a bill designed to address problems from the country's so-called "sub-prime mortgage collapse." The Act provides for government grants allowing municipalities to buy and redevelop foreclosed properties, and would allow the federal government to provide additional financial backing to the publicly supported Fannie Mae and Freddie Mac [corporate websites] mortgage companies. The bill passed by a vote of 272-152, and is also expected to be approved by the Senate later this week. President Bush has said he will sign the bill [NYT report], rescinding an earlier veto threat because of the included grants. Opponents of the bill have said it puts an unfair burden on taxpayers by "socializing costs" but "privatizing profits," of the mortgage industry, and that bill sponsors have tacked on unnecessary and controversial measures to the otherwise bipartisan Act. McClatchy has more.

Earlier this month, the Federal Reserve Board approved new rules for home mortgage loans [draft regulations, PDF; JURIST report] designed to reduce unfair lending practices and increase consumer protection. In June, the Federal Bureau of Investigation (FBI) [official website] announced that more than 400 people had been indicted [press release; JURIST report] for fraud involving individual mortgages and the US Attorney's Office for the Eastern District of New York [official website] announced the indictments [text, PDF; press release] of two senior hedge fund managers at Bear Stearns [corporate website] for allegedly misleading investors even after they knew their mortgage-related funds were at serious risk of collapse.

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