A plan by Republicans in the Senate aimed at pushing mortgage rates lower has gone down to defeat at the hands of Democrats.
The plan by Nevada Republican John Ensign would have encouraged banks to issue mortgages with interest rates of 4 to 4.5 percent. The government-controlled mortgage giants Fannie Mae and Freddie Mac would have bought the mortgages on the secondary market. Jumbo loans would have been ineligible.
Democrats killed the idea Thursday night by a 62-35 vote.
The plan also contained an assortment of expensive tax cuts such as cutting the bottom 10 percent income tax rate in half for two years.
New York Democrat Charles Schumer said the plan was too expensive and would provide a windfall to banks charging fees to refinance mortgages.
(Copyright 2009 by The Associated Press. All Rights Reserved.)
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