Critics: Senate Plan Not Enough

Housing legislation doesn't do enough to help homeowners, they say
By Jim O'Neill,  Newser User
Posted Apr 3, 2008 11:55 AM CDT
Senate Banking Committee Chairman Sen. Christopher Dodd, D-Conn., left, and the committee's ranking Republican, Sen. Richard Shelby, R-Ala., right.   (AP Photo/Dennis Cook)
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(Newser) – The Senate’s first major step toward trying to make sense of the US mortgage mess is a needed salve to businesses caught in the chaos, but it doesn’t go far enough to help homeowners, critics say. Lawmakers contend the plan is a start toward addressing a multitude of problems resulting from a devastating housing slump, reports the Los Angeles Times.

The deal, which could be approved this week, doesn’t include a contentious provision to allow bankruptcy judges to modify mortgage terms, nor does it address a House Democratic plan to allow the Federal Housing Administration to issue $300 billion in loan guarantees. Critics say the deal favors the mortgage industry over borrowers.