Democrats encounter head winds on mortgage bill

WASHINGTON Senate Democrats encountered delays and a veto threat Tuesday as they pushed a bill aimed at helping bankrupt homeowners avoid foreclosure. Republicans put off a vote on the Foreclosure Prevention Act, which they and many lenders oppose, by agreeing to let the Senate begin an extended debate on a bill that would speed the withdrawal of U.S. troops from Iraq.

Democrats said the move amounted to a stalling tactic and promised to try again to pass a bill they say would help about 600,000 bankrupt homeowners. “It seems to me they’re going to do everything they can to keep us from getting to the important housing legislation,” Reid told reporters.

Raising a further obstacle, the White House said President Bush would veto the bill in its present form because of another of its provisions that would provide $4 billion to communities to purchase and rehabilitate foreclosed homes. That “would constitute a bailout for lenders and speculators, while doing little to help struggling homeowners,” the White House said.

More evidence of the mortgage crisis’s continuing toll came Tuesday when the closely watched S&P/Case-Shiller home-price index showed that in December, home prices were down more than 9 percent from the previous year a record decline. “House prices are in a free fall,” Patrick?Newport, an economist with the forecasting firm Global Insight Inc., said in a written assessment of the S&P/Case-Shiller data.