For more information on the Fair: Tony Ormsby, 2008 Fair Coordinator, 303-739-7911,

Congress approved mortgage relief for 400,000 struggling homeowners as part of an election-year housing plan that also aims to calm jittery financial markets and bolster the sagging economy. President Bush said he would sign it promptly, despite reservations.

The measure, regarded as the most significant housing legislation in decades, lets homeowners who cannot afford their payments refinance into more affordable government-backed loans rather than lose their homes.

What began as a showdown between the White House and the Democratic-led Congress over how far the government should go in rescuing homeowners evolved into a bipartisan effort that could be the last such compromise before Bush leaves office in January.

In a rare Saturday session, the Senate voted 72-13 to send the bill to the president; the House passed it Wednesday.

Bush had withdrawn his veto threat earlier in the week over $3.9 billion in neighborhood grants. He contended the money would benefit lenders who helped cause the mortgage meltdown, encouraging them to foreclose rather than work with borrowers.

"Because of the Democratic Congress' delays and the need for action now, President Bush will sign this bill when he receives it, despite our concerns with some provisions, including nearly $4 billion to help lenders, not the homeowners this legislation is intended to serve," said Tony Fratto, deputy White House press secretary.

Many Republicans, particularly those from areas hit hardest by housing woes, were eager to get behind a housing rescue as they looked ahead to tough re-election contests. Treasury Secretary Henry M. Paulson's request for the emergency power to rescue Fannie Mae and Freddie Mac helped push through the measure. So did the creation of a regulator with stronger reins on the government-sponsored companies, as Republicans long have sought.

Democrats won cherished priorities in the bargain: the aid for homeowners, a permanent affordable housing fund financed by Fannie Mae and Freddie Mac, and the neighborhood grants.

Still, Republicans weren't eager to celebrate. Bush was not expected to hold a White House signing ceremony, and Senate GOP leaders didn't mention it at a news conference following the vote.

In the House, more than three-quarters of Republicans voted against the bill.

Dodd, D-Conn., said he had summoned administration officials to his office next week to demand that the foreclosure rescue program be put into place quickly.

The legislation takes several approaches to curing the ailing housing market.

It aims to spare an estimated 400,000 debt-strapped homeowners, many of whom owe more their houses are worth, from foreclosure by allowing them to get more affordable mortgages backed by the Federal Housing Administration.

The FHA could insure $300 billion in such mortgages, which would be available to homeowners who showed they could afford a new loan.

Banks would first have to agree to take a large loss on the existing loans in exchange for avoiding an often-costly foreclosure.

The plan also is designed to relieve a broader credit crunch that has taken hold because of rising defaults and falling home values. To free up safer and more affordable mortgage credit, the bill permanently would increase to $625,000 the size of home loans that Fannie Mae and Freddie Mac can buy and the FHA can insure.

They also could buy and back mortgages 15 percent higher than the median home price in certain areas.

The measure tries to prevent blight in areas hardest hit by the housing crisis, where waves of foreclosures have left properties sitting abandoned, dragging down property values and ruining neighborhoods. It sends $3.9 billion to such neighborhoods to buy and fix up foreclosed properties.

It goes far beyond addressing the current crisis, however.

The legislation overhauls the Depression-era FHA. It requires lenders to show how high a borrower's payment could get under the terms of his mortgage. It provides $180 million in pre-foreclosure counseling for struggling homeowners.

The Treasury Department gains unlimited power, until the end of 2009, to lend money to Fannie Mae and Freddie Mac or buy their stock should they need it. The Federal Reserve takes on a new "consultative" role overseeing the companies.

The measure includes $15 billion in tax cuts, including a significant expansion of the low-income housing tax credit and a credit of up to $7,500 for first-time home buyers for houses purchased between April 9, 2008, and July 1, 2009.

Democratic leaders, recognizing that the measure could be one of the last items to become law during what's left of their abbreviated election-year schedule, tacked on an $800 billion increase, to $10.6 trillion, in the statutory limit on the national debt.

Conservative Republicans were vehemently opposed to the bill, particularly the help for Fannie Mae and Freddie Mac. Critics charge the companies enjoy lavish profits in good times and wield their outsized political clout to resist regulation while depending on the government to bail them out should they falter.

Sen. Jim DeMint, R-S.C., delayed the final vote because Democrats refused to allow him a vote on a proposal to ban the companies from lobbying or making political donations to lawmakers.

"We can't have the people who are supposed to watch over these organizations getting money from these organizations," DeMint said. "At least if we're going to ask the American taxpayer to be on the hook for billions, possibly trillions of dollars, let's stop this."

A proposed mixed-use development on the western edge of Castle Rock was defeated on second reading before a standing-room-only crowd at the town’s council meeting.

Town council shut down the proposed Hillside at Castle Rock annexation July 15 after granting earlier support during the November 2007 first reading. Town council reconsidered its decision in the face of an outpouring of community objection.

The council’s change of heart was met with wild cheering and applause from a crowd that voiced its objection during nearly an hour of public comments before the council rendered its decision.

"We were told, when we purchased our home four years ago, that [the property at Hillside] was zoned for single-family homes on 1-acre lots," said Dirk Vandervoort, who lives across Wolfensberger from the proposed development. Vandervoort’s Castle Highlands home sits in the shadow of the mesa earmarked for development.

"I ... do not understand why businesses need to be mixed in with residences," Vandervoort said.

Vandervoort’s comments echoed those of about a dozen who urged town council to reject the proposed annexation. The council eventually agreed with residents in a vote of 3-2 to shut down the annexation request.

"Good job!" a lone voice from the audience cried, triggering a noisy show of support of the council’s decision.

The decision came after years of negotiations between the town and the developer, with the town driving the plans for the development to its fateful end.

The Hillside at Castle Rock was originally proposed by the Wolfensberger Property Group LLC in 2004 as a planned development with 100 single-family homes.

Subsequent meetings with the town resulted in a proposal for a mixed-use development with up to 190 nontraditional dwelling units and 130,000 square feet of commercial space, said Miles Grant, owner and partner of the Wolfensberger Property Group.

The mixed-use concept is mirrored in the town’s comprehensive master plan and 2020 vision to create more self-sustaining developments in and around Castle Rock, said Jason Reynolds, zoning manager, Castle Rock development services.

In the face of the council’s decision to deny the proposed development, town leaders conceded the time to revisit the town’s vision might be at hand.

Despite the town’s stated intent to create pockets of mixed-use developments among Castle Rock’s slew of single-family homes, councils have long rejected proposals that combine commercial with residential, said Mark Stevens, town manager. Those decisions reflect a disparity between the town’s vision and that of its residents, Stevens said.

The right place for mixed-use development might not be in Castle Rock, based upon the values of the community reflected in years of public outcry against the plan, Stevens said. The dilemma is one the town has faced for nearly 20 years as councils have rejected one mixed-use proposal after another, he said.

"Maybe we should change the plan," Stevens said. "It all sounds nice in the master plan but sometimes in the real world, the real world’s a little messier."

One councilmember who supported the Hillside proposal said the town faces a balancing act between maintaining high quality and providing services. Developments such as the Hillside at Castle Rock could see public support with more communication between the developer and the surrounding neighbors, said Joe Procopio, councilman, District 7.

"Everybody wants to have a nice residential community … but if we want to maintain our quality of life we have to find a way to keep revenue coming in to take care of operations and maintenance," Procopio said. "We have to find ways to attract clean, responsible businesses into the town so we can sustain our quality of life."

Grant could not be reached for comment following the council’s decision but Reynolds said the Wolfensberger Property Group might begin a community outreach to solicit support of the Hillside at Castle Rock.

Vandervoort, for one, will keep an eye out for every opportunity to remain involved in the process.

"Sometimes you feel so outnumbered by the [people who make the decisions]," Vandervoort said. "This time we outnumbered them. If people get together, this is the kind of thing that can happen."

A committee that wants to recall Mayor Paul Natale said Monday night the Commerce City city clerk accepted its paperwork.

According to two members of the committee, Rene and Debra Bullock, the group wants to recall Natale because of alleged violations of the city charter and for what the group called fiscal irresponsibility. The Bullocks also said Natale "has not treated all citizens fairly and equally."

Petition organizers plan to gather signatures from 10 a.m. to 2 p.m., Saturday, July 26, at 6130 Ivanhoe St. Call 303-287-6747 or 303-946-3426 with questions.

Neither of the Bullocks nor Natale was available for comment early Tuesday morning.

Don Tressler, of Metro Brokers Inc./Tressler and Company in Denver and a member of the Denver Board of Realtors’ government affairs committee, stands in front of a house for sale at 1424 S. Clayton St. The older-style house next store also is for sale. Tressler says some residents fear a "downzoning" battle over the changes.

Denver’s planning department finally is writing the first major update to the city’s zoning code in more than 50 years.

A draft of the code is expected this fall, and the final version is expected to go into effect in 2009, according to the Zoning Code Task Force (ZCTF).

City and County of Denver planning officials, headed by manager Peter Park, hope the new form- and context-based code will make zoning in Denver easier and more flexible, and maintain the character of the city’s diverse urban neighborhoods. The city started working on the update in early 2005.

The updated code also will be an ideological shift away from the old code, which tells property owners what they can’t do with their sites, to what the city wants them to do, according to its creators.

"We’re at the end of the beginning of the zoning code update," Park said. "We’ll have a better code than we have today."

Reaction to preliminary information about the update from real estate professionals and neighborhood groups has been mixed so far. Some embrace the new form- and context-based approach; others say it could be too restrictive and will hamstring development.

"I really do feel the planning department has been listening to the development community. … I deal a lot with zoning especially in Cherry Creek North," Crosby said, speaking of commercial development. "Our current zoning there is very prescriptive, and it’s important to allow for more flexibility in the future."

The Nichols company developed Cherry Creek North’s mixed-use Clayton Lane area of shops, restaurants, housing and the J.W. Marriott Hotel. It’s currently building downtown Denver’s Spire high-rise condominium project.

Denver City Councilman Chris Nevitt of District 7, which includes South Denver and neighborhoods such as Washington Park, hopes the updated zoning code will fix the city’s current "mismatched" zoning policy, which allows for buildings that "look like they’re designed somewhere else and just dropped here."

"If your purpose is to maximize developable square footage in a new project, you might interpret the new code as too restrictive," Nevitt said.

Park says the zoning code update won’t be like northwest Denver’s recent rezoning.

There’s also concern new development will have to fit a neighborhood’s historic context, and won’t satisfy current market demands. Some Realtors fear a new house in West Washington Park, for example, will have to look like surrounding bungalows and won’t be able to accommodate a family that needs four bedrooms and a big backyard.

Advocates of the new code expect it to increase property values and have a positive economic impact on Denver.

The updated code also won’t necessarily halt controversial practices such as "scrape-offs," which is the demolition of old homes and the building of new ones on the same lot, but it will strive to control what they look like.

"Stopping scrape-offs is unrealistic," Park said. "What the new code means is we’ll have a code that’s easier to use, and gives the homeowner or developer a clearer way of adding to a house that will be more sensitive to the neighborhood."

The city’s Board of Adjustment, which hears and decides on appeals to zoning decisions, will continue to operate under the zoning code update, and hopefully will see fewer appeals because of the updated code’s increased flexibility, according to the planning department.

The zoning code update is part of Blueprint Denver, which was adopted in 2002 and is the land-use and transportation portion of the city’s 2000 comprehensive plan. The update modernizes Denver’s current zoning regulations, created in 1956.

Once the new code is written, the planning department will take the draft to different neighborhoods for public comment and tweaking before it’s finalized, according to Park. Because the zoning code is a law, and the update is amending that law, the Denver City Council must vote on it.

Rescue legislation sailed through the House on Wednesday aimed at helping 400,000 strapped homeowners avoid foreclosure and preventing troubled mortgage giants Fannie Mae and Freddie Mac from collapsing.

The 272-152 vote reflected a congressional push to send election- year help to struggling borrowers and to reassure jittery financial markets about the health of two pillars of the mortgage market.

Hours before the vote, President Bush dropped his opposition to the measure, which is on track to pass the Senate and become law within days.

The White House swallowed its distaste for $3.9 billion in grants the bill would provide for devastated neighborhoods. The Bush administration gains the power to throw a lifeline to Fannie Mae and Freddie Mac as part of the measure that also is designed to rein in the government-sponsored mortgage firms.

The administration and lawmakers in both parties teamed to negotiate the measure, which accomplishes several Democratic priorities, including federal help for homeowners, a new permanent, affordable housing fund financed by Fannie and Freddie and the $3.9 billion for hard-hit neighborhoods. The grants are for buying and fixing up foreclosed properties.

"It is the product of a very significant set of compromises," said Rep. Barney Frank, D-Mass., the Financial Services Committee chairman. "We are dealing with the consequences of bad decisions and inaction and malfeasance from years before. Obviously, it requires a joint effort.

"In a statement on the bill, the White House said parts of it "are too important to the stability of our nation's housing market, financial system and the broader economy not to be enacted immediately."

Bush had objected to the neighborhood grants, saying they would help bankers and lenders, not homeowners who are in trouble. Still, Dana Perino, the White House press secretary, said a showdown with Congress over the funds would be ill-timed.

It was a striking split for Bush and many congressional Republicans. GOP leaders denounced the housing legislation as a bailout for irresponsible homeowners and unscrupulous lenders, even as they acknowledged it was probably necessary.

"It's a bill that I wish I could support. It's a bill that the market clearly needs . . . but this is not a bill that I can support," said Rep. John A. Boehner, R-Ohio, the minority leader.

The plan also creates a regulator with tighter controls for Fannie Mae and Freddie Mac and modernizes the agency. It includes $15 billion in housing tax breaks, including a credit of up to $7,500 for first-time buyers.

It also increases the statutory limit on the national debt by $800 billion, to $10.6 trillion.

Lawmakers abandoned efforts to place conditions on any Fannie and Freddie rescue, but the bill hands the new regulator approval power over the pay packages of executives at the companies.

In his own words

Zachary Urban, Brothers Redevelopment, manages the Colorado Foreclosure Hotline, 1-877-601-HOPE.

Urban says the bill might help 15 percent to 20 percent of the 2,000 people who call the hot line each month.

* "The behavior that really irks people is when someone has an RV in the driveway, a brand-new car and a flat screen TV, and they're going into foreclosure because of poor consumer choices," Urban said. "But this bill is not going to be a whole lot of help to people who do not have a life vest and an anchor on each of their feet." However, other people are facing losing their homes because the value of their house has been greatly depressed by the large number of distressed homes in their neighborhood, Urban said.

* "If you wait for the government to bail you out, you end out on a rooftop in New Orleans," Urban said. "This bill is not going to be the demarcation line between foreclosures and no foreclosures. It is going to help reduce some of the friction, some of the gridlock, for people waiting on the sidelines to buy properties. It's not going to help people who made a lot of bad choices or had an overzealous appetite for properties. I think the bill, from the Fannie and Freddie sides, will bring some stability to the housing market, which it needs right now. One thing needs to be clear: No lender in his or her right mind is going to be lending right now to someone who does not show good quality, underwriting criteria."

Ryan McMaken, of the Colorado Division of Housing.

* "We're certainly supportive of any funding for housing counseling. Housing counseling is the only thing that helps people who are currently in foreclosure. That is what helps people right now."

Assistance

The housing bill Congress is preparing to send President Bush would:

* Give the Federal Housing Administration $300 billion in new lending authority and relax standards to provide affordable, fixed-rate mortgages to debt-ridden homeowners. Any losses would be covered by an affordable housing fund financed by Fannie Mae and Freddie Mac, the government-sponsored companies that finance mortgages.

* Give the Treasury Department temporary authority to lend money to Fannie and Freddie or buy their stock to avert a collapse of one or both of the mortgage giants. The authority expires on Dec. 31, 2009.

* Create a new regulator and tighten controls on Fannie and Freddie, including power for the regulator to approve pay packages for company executives. Create a new affordable housing fund drawn from their profits. Permanently raise the limit on the loans they may buy - set to revert to $417,000 by the end of the year - to $625,000 in the highest-cost areas. Allow them to buy loans 15 percent higher than the median home price in certain cities.

* Provide $3.9 billion in grants to the hardest-hit communities for buying and fixing up foreclosed property.

* Modernize the FHA and allow it to back loans for riskier borrowers. Permanently increase the size of loans the agency may insure - currently set to revert to $362,790 by the end of the year - to $625,000 in the highest-cost areas. The agency could buy loans 15 percent higher than the median home price in certain cities.

* Bar the FHA from insuring mortgages in which the borrower's down payment is paid by the seller, beginning Oct. 1, 2008.

Place a one-year moratorium to bar the agency from charging premiums based on the riskiness of the homeowner, until Oct. 1, 2009.

* Provide $15 billion in housing tax breaks, including for low-income housing. Give a credit of up to $7,500 for first-time home buyers who purchase residences between April 9, 2008, and July 1, 2009. Allows people who don't itemize their taxes to claim a $500-$1,000 deduction on their 2008 property taxes.

* Give states an additional $11 billion in tax-free municipal bond authority for low-interest loans to first-time home buyers, construction of low-income rental housing and refinancing subprime mortgages.

* Offer protection from investor lawsuits for mortgage holders that modify loans to borrowers who are in default or about to default.

* Provide $180 million for pre-foreclosure counseling and legal services for distressed borrowers.

Contrary to an email you may have received, the Housing bill being considered in Congress this week does NOT eliminate all downpayment assistance programs from eligibility for FHA insurance. The legislation would only prohibit seller-funded downpayment assistance, or assistance from someone who financially benefits from the transaction. Other forms of assistance - such as family members, government-sponsored programs, or gifts from non-profits would still be permitted. The Housing bill also contains many reforms that we believe are critical to housing markets. The bill includes FHA reform, GSE reform, a homebuyer tax credit, and permanent increases to the FHA and GSE loan limits. This bill will help millions of American families avoid foreclosure and safely and affordably achieve the dream of homeownership.

FHA is the only mortgage program that has allowed seller-funded downpayment assistance. However, FHA’s recent default rate is troubling. Due to the current performance of its loans, FHA must receive a federal subsidy for the first time in its history, or raise it premiums on borrowers in order to remain solvent. This is primarily due to loans with seller-funded downpayment assistance, which have a default rate 3X higher than other FHA loans. Loans that receive downpayment assistance perform less well than loans without downpayment assistance. A recent GAO study found that loans with seller-funded downpayment assistance experienced more than double the risk of delinquency than loans with other types of downpayment assistance, and almost three-times the risk of loans with no downpayment assistance. (Additional Action Needed to Manage Risks of FHA-Insurance Loans with Downpayment Assistance, United States Government Accountability Office, November 2005.)

We are also concerned about recent studies that demonstrated that seller-funded downpayment programs often result in inflated home prices. These studies showed that homes sold using this type of downpayment assistance typically sold for 2-3% higher than comparable homes without downpayment assistance. (Seller-Funded Down-Payment Assistance Changes the Structure of the Purchase Transaction and Negatively Affects Loan Performance, United States Government Accountability Office, June 22, 2007.) When a borrower takes out a mortgage on a home with an inflated price, not only are they at greater risk for foreclosure, but the resulting inflated price can have ramifications to the housing market in that community. Home sales prices are used as comparables to determine the price of other homes. Inflated prices overstate the market demand and can lead to exaggerated home sales prices in the neighborhood. This can magnify what housing affordability problems already exist in these communities. In addition, inflated home prices impact the risk to the FHA fund by increasing the "severity of individual claims on the FHA Insurance Fund and FHA losses on claims paid on such mortgages."(HUD Proposed Rule, "Standards for Mortgagor’s Investment in Mortgaged Property", F