As the House of Representatives votes on its housing stimulus package today, the Bush Administration issued a “Statement of Administration Policy” yesterday threatening to veto the package, which looks to nearly double the FHA’s loan portfolio by granting it authority to insure an additional $300 billion of mortgages. The administration’s statement said that the measure is “overly burdensome and prescriptive” as it would “force FHA and taxpayers to take on excessive risk and jeopardize FHA’s financial solvency.”

Senate Banking Chairman Christopher Dodd (D-Conn.) vowed yesterday to move legislation he is sponsoring that would curb some credit card practices even though the Federal Reserve is scheduled Friday to release rules against abusive and unfair card terms, CongressDaily reported today. The Fed is expected to issue its preliminary rules Friday to rein in some abuses, but Dodd said that he thinks such regulations will not go far enough. The bill he is sponsoring includes some similar provisions that are contained in a House version sponsored by Financial Services Financial Institutions Subcommittee Chairwoman Carolyn Maloney (D-N.Y.), including a ban on the practice of “universal default.” Unlike the House bill, the Dodd’s measure would place additional restrictions on issuing cards to those under 21 years of age, requiring them to obtain the signature of a parent, guardian or other person who will take responsibility for any debt.

See Also: American Bankruptcy Institute

A group of lenders has objected to M. Fabrikant & Sons Inc.’s latest proposed chapter 11 liquidation plan, saying that if approved, it would prejudge a dispute between the lenders and the company’s creditors, Bankruptcy Law360 reported on Friday. The objection was filed on Tuesday by JPMorgan Chase Bank NA, ABN Amro Bank NV, Bank of America NA, HSBC Bank USA and others. The banks said that the plan filed jointly by Fabrikant and its creditors committee on April 16, improperly addressed the lender’s right to recover attorneys’ fees in an adversary proceeding brought by the creditors. That should be decided as part of the adversary proceeding itself, the objection said.

The House Judiciary Committee on Wednesday will mark up H.R. 4044, a bill that would exempt military reservists called to active duty and certain others from application of the means test in chapter 7, CongressDaily reported today. Also on Wednesday, the House Financial Services Committee will finish its markup of legislation that would allow the Federal Housing Administration to refinance up to $300 billion in new guarantees for subprime loans at risk of default. The panel began debate on the bill last week and the measure will be part of the housing-stimulus package that will be considered on the House floor the week of May 5.

Ford Motor Co. is showing signs of a surprise turnaround, though the automaker isn’t done cost-cutting as more job cuts may be on the way, according to the Wall Street Journal today. In 2007, Ford startled the industry by reporting $400 million in positive operating cash flow, something General Motors Corp. and Chrysler LLC have been hard-pressed to match. Ford CEO Alan Mulally is reportedly looking to sell its Volvo unit, despite Ford’s repeated statements that it intends to hang on to the brand. Similarly, he said he hopes to shutter the ailing Mercury brand. More job cuts may also be coming to Ford. In the company’s most recent buyout offer, only about 4,000 workers signed on, about half the desired total. Mulally will likely offer one more round, then could resort to layoffs.

The parent company of United Airlines, the UAL Corporation, yesterday reported a $537 million loss in the first quarter as a 51 percent increase in fuel costs overwhelmed efforts to raise fares at the country’s second-largest carrier, the New York Times reported today. United plans to reduce employment by 1,100 by the end of the year, as airlines begin a new round of layoffs. United increased the number of planes it plans to shed to 30, from an earlier estimate of 15 to 20, in hopes of constraining capacity and driving fares up further. JetBlue Airways and AirTran Holdings, two formerly fast-growing discount carriers, also posted first-quarter losses. JetBlue reduced its growth plans for the year, hoping to keep raising fares. AirTran said that it would delay growth plans in the 16 months beginning in September. AirTran, whose shares have fallen in the wake of bankruptcy filings by some smaller carriers, said that it would sell notes and stock to raise about $110 million and bolster its cushion against the downturn.

A new report from a coalition of state attorneys general and banking regulators said that seven out of 10 troubled mortgage borrowers remain without a plan to work out their loans despite increased industry efforts to help them, the Washington Post reported today. The group collected data from 13 of the largest subprime lenders from October through January and found that the lenders are overwhelmed by their workloads and unable to keep pace with the number of borrowers who are falling behind on payments. “There still seems to be a disconnect between homeowners and their mortgage servicers,” said Mark E. Pearce, North Carolina’s deputy commissioner of banks. However, the coalition reported that the number of late borrowers working with their lenders to prevent foreclosure has increased and that the measures taken by lenders to help them have become more aggressive. Instead of rescheduling missed payments, the report found that more lenders reduced the overall burden by modifying loan terms. They lowered interest rates or extended the term of the loan to cut payments. Less often, they forgave part of the principal.

Members of the House Financial Services Committee introduced two pieces of legislation yesterday that focus on reversing the housing market crisis, and are looking to mark up the bills next week, according to a House Financial Services Committee press release. H.R. 5830, the FHA Housing and Homeowner Retention Act, expands the Federal Housing Administration program to help refinance at-risk borrowers into viable mortgages and also requires the Federal Reserve Board to conduct a study on the need for an auction or bulk refinancing mechanism. The second measure, H.R. 5818, the Neighborhood Stabilization Act of 2008, will provide loans and grants to states and cities to deal with problems associated with large numbers of foreclosures in neighborhoods across the country. A House Financial Services Committee mark-up session and vote on the two measures are scheduled for 10:00 a.m. on Wednesday, April 23rd and Thursday, April 24th.

Presidential candidate Sen. John McCain (R-Ariz.) is laying out an economic plan that includes increased Medicare premiums for wealthy seniors and a one-year freeze on spending along with a proposal to review a vast swath of federal programs, the Wall Street Journal reported today. He plans to aid students caught in the credit crunch who may have trouble obtaining college loans and to call for another big tax cut — this one helping families with children. On taxes, McCain will propose doubling the exemption for dependents from $3,500 per dependent to $7,000. That would cost $65 billion per year, the campaign said. McCain has already proposed a variety of other tax breaks, including reducing the corporate tax break to 25 percent from 35 percent at a cost of about $100 billion per year.

The consumer spending slump and tightening credit markets are unleashing a widening wave of bankruptcies in American retailing, prompting thousands of store closings that are expected to remake suburban malls and downtown shopping districts across the country, the New York Times reported today. Since last fall, eight mostly midsize chains — as diverse as the furniture store Levitz and the electronics seller Sharper Image — have filed for bankruptcy protection as they staggered under mounting debt and declining sales. However, the troubles are quickly spreading to bigger national companies, such as Linens ‘n Things, the bedding and furniture retailer with 500 stores in 47 states, which may file for bankruptcy as early as this week. Even retailers that can avoid bankruptcy are shutting down stores to preserve cash through what could be a long economic downturn. Over the next year, Foot Locker said that it would close 140 stores, Ann Taylor will start to shutter 117, and the jeweler Zales will close 100.