CAPITOL HILL (AP) -- The Senate has passed a bill that could provide some relief to families facing steep increases in their mortgage payments.
The measure, approved by a 93-1 vote, would allow the Federal Housing Administration to back refinanced loans for homeowners facing foreclosure because of the ballooning interest rates on their subprime mortgages.
Up to 2.5 million adjustable-rate mortgages are scheduled to "reset" this year or next. The bill raises the maximum mortgage the FHA can insure up to $417,000, the same levels backed by Fannie Mae and Freddie Mac.
New York Democratic Senator Charles Schumer says the legislation clears the way for the FHA to "be a source of salvation for those families who were tricked into unaffordable loans."
A similar bill was passed in September by the House. The two chambers have to come to an agreement before sending the final bill to the White House for approval.