House passes housing bill; Bush lifts veto threat

The House of Representatives passed a massive housing rescue bill on Wednesday after the White House dropped a threatened veto, paving the way for passage of measures aimed at shoring up the worst U.S. home market since the Great Depression.
Withdrawal of the veto threat spurred investors to snap up shares and bonds of mortgage finance companies Fannie Mae and Freddie Mac, which would receive an emergency government lifeline under the election-year bill.
Approved on a 272-152 vote, the bill now moves to the Senate, where approval was expected within days, with the precise timing of a final vote still uncertain.
The bill had been in the works for months, but took on greater urgency as concerns about Fannie and Freddie's finances began to rattle global financial markets earlier this month.
Ten days ago, the U.S. Treasury pledged an unspecified credit line for the companies and said it would buy their stock, if needed, to bolster investor confidence. Those emergency measures required congressional approval.
The two companies, which own or guarantee almost half of the $12 trillion in U.S. mortgage debt outstanding, have recorded heavy losses in the past year amid rising defaults.
If they were unable to keep financing mortgages, analysts say the already weak housing market could grind to a halt, tipping the U.S. economy into a deep recession.