A Senate agreement Tuesday pushed Congress significantly closer toward a bill that would expand the federal government's role in propping up the housing market. Housing legislation took another big step forward as the Senate Banking Committee, by a 19-2 vote, marked up the Federal Housing Finance Reform Act of 2008. Mortgage Banker Association Chairman Kieran Quinn said the markup was a "very important development that has the potential to play a large part in helping the recovery of the housing and mortgage sectors." The bill contains several elements supported by the MBA, including a provision that would reform oversight of the government-sponsored enterprises-Fannie Mae, Freddie Mac and the Federal Home Loan Banks. It also includes provisions aimed at helping borrowers avoid foreclosure, including FHA modernization, voluntary housing "rescue" efforts and tax relief.

The next step is for the full Senate to vote on the bill, which is likely to happen in June. "The House and Senate have to knit these elements together and make it agreeable," he said. Committee Chairman Christopher Dodd, a Connecticut Democrat, said the goal is to have a bill on the President's desk by July 4. He and the committee's ranking Republican, Senator Richard Shelby, worked together over the weekend to craft a bill that overcomes most GOP opposition to the bill, although President Bush continues to threaten to veto the bill because of what he says are "bailout" provisions for lenders and borrowers.