The legislation would enable the Federal Housing Administrationto offer mortgage guarantees in certain situations in which thelender writes down a portion of the outstanding loan. It alsocreates an independent regulatory for Fannie Mae and Freddie Maccalled the Federal Housing Finance Agency. The bill also calls forthe establishment of an affordable housing trust fund.

The bill, "the Federal Housing Finance Regulatory Reform Act of2008," is going into mark-up this morning, after which it will bepresented to the full Senate for a vote."This legislation is goodnews for both the markets and homeowners," says Dodd in a preparedstatement. "The bill addresses the root of our current economicproblems--the foreclosure crisis--by creating a voluntaryinitiative at no estimated cost to taxpayers which will helpAmericans keep their homes. The bill also establishes a new fundthat will help create more affordable housing for millions forAmericans."

For his part Shelby noted that the new GSE regulator createdunder this legislation--the Federal Housing Finance Agency--wouldbe granted enough authority and flexibility to regulate the GSEs.He also emphasized that the affordable housing initiative would notbe taxpayer funded.