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Morning Mortgage Meltdown: Double Whammy, Single Bright Spot

· Bush has left the door open (for once!) to discussion of a new mortgage crisis relief plan currently in the works in the Senate; if passed, Fannie Mae and Freddie Mac would backstop the mortgage insurance fund with monies culled from a new affordable housing fund. The administration is demanding stricter oversight for Fannie and Freddie, gouging risky borrowers for higher mortgage insurance rates. While the Senate is struggling to appease the While House, it's proposed FHA insurance fund isn't going over so well with G.W.B. [Reuters]

· WaMu has cut $6 billion in available home equity credit in order to save its own ass in a flailing market. Watch out for the junk mail this week, as all affected parties should expect to receive a letter notifying them of their imminent financial demise. [EB Business Times]

· A happy note: R: In April, home construction rose at the highest rate in 2 years. Go figure. [Charleston Gazette]