Coalition defends housing rescue

A bipartisan coalition supporting a massive foreclosure rescue beat back Republican efforts to gut it Thursday, defying a White House veto threat and quashing a bid to make it victim to revelations about two senators' VIP mortgages.

Administration officials said they oppose the inclusion of $4billion in the measure to help states buy and rehabilitate foreclosed properties, and a plan to have government-sponsored mortgage giants Fannie Mae and Freddie Mac pay for the rescue.

They announced those and other objections as two GOP senators said they would try to block the package until a committee can investigate how much Countrywide Financial and other lenders stand to gain from it.

House and Senate Republicans are voicing reservations about the bill in light of allegations that Senate Banking Committee Chairman Chris Dodd, D-Conn., one of its architects, and Senate Budget Committee Chairman Kent Conrad, D-N.D., got cut-rate home loans through a VIP program at Countrywide, a leading subprime lender at the center of the mortgage meltdown.

Both said they neither sought nor knew about the special treatment.

“This bill has come together in such a way as to raise questions all over this country that we need to answer before we move ahead,” Sen. Jim DeMint, R-S.C., said.

The Senate rejected, 70-11, the move by DeMint and Sen. Jim Bunning, R-Ky., to send the housing package back to Dodd's panel which would have essentially killed it.

The election-year bill, which could help hundreds of thousands of struggling homeowners, appeared to be drawing wide bipartisan backing.