Fearing that the current state of the housing market is dragging the economy into recession, the senate today passed a test vote approving the biggest government program ever to bail out troubled homeowners. This legislation, if passed, will create a $300 billion fund to help up to 400,000 homeowners refinance their current loans into more affordable government backed loans.

This bill easily passed a senate test vote 83-9 and is supported by both Democrats and Republicans alike. There are spending aspects of the proposed bill that the White House is leery of and thus will need revisions before President Bush will support the bill. This bill can pass as early as Mid-July.

The new bailout bill will be funded with new tariffs on Fannie Mae and Freddie Mac. It will also subject both mortgage enterprises to regulation overhauls. In light of Fannie and Freddie's slow response to help recovery in the troubled housing market, many are optimistic that this new legislation will provide the relief needed to correct the market.

No word yet as to have this will affect the most recent Homeowner's Economic Stimulus Package. Stay tuned to TheOCmls.com for regular updates.