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Morning Mortgage Meltdown: Congress Pities the Fool with Bid for Mortgage Aid

“This is not April Fool's ... This is serious business" said Nevadan Senator Harry Reid of a bipartisan bill designed to help millions avoid home foreclosure, and set to hit the Senate floor as early as tomorrow. Though Republicans are already accusing Democrats of inflating the numbers—so much for "Kumbaya"— an estimated 1.5 million homeowners are expected to be delivered from financial ruin by a package aimed at helping folks refinance 15-year adjustable-rate mortgages into less-risky loans. This is no time for avant garde financing, people; think tradition, think pragmatism. Think about the next 30 years of your life, 'cause that's how long you're actually going to be shelling out for that traditional-meets-contemporary condo in SoMa. Well played. Savior Senate is expected to perform the following corporal works of mercy:

· $200 million will be allocated for the expansion of counseling programs for those at risk of foreclosure. Marriage counseling not included, we're sad to report.

· Local housing authorities will have $10 billion with which to refinance subprime loans. (Commence with the embezzlement plans!) $4 billion also goes out to local govs for the purchase of foreclosed properties.

· Buyers of aforementioned foreclosed properties will receive a $15k tax credit. W00t!

· Extra bonus miracle: Both the Senate Banking Committee and the House Financial Services Committee have been working on bills that would allow the Federal Housing Administration to insure $300 billion to $400 billion in additional mortgages, with an upfront cost of $10 billion.
· A Bipartisan Bid on Mortgage Aid Is Gaining Speed [NYT]