WASHINGTON  A key Democratic congressman is planning a push to expand the federal government’s role in stabilizing the housing market, setting up a showdown with a White House that has largely looked for private-sector solutions.
Barney Frank, D-Mass., the chairman of the House Financial Services Committee, is floating an initiative that aims to refinance as many as one million “distressed” homeowners out of high-cost loans using government assistance. The proposal, which could cost up to $15 billion over five years, would likely involve the federal government buying loans and then helping move borrowers into mortgages backed by the Federal Housing Administration. Certain loans, such as investment properties and those on vacation homes, wouldn’t qualify.
In order to sell a loan to the government under the plan, the lender would likely …
