The U.S. Senate voted 72-13 in Washington during a rare Saturday session, following a July 23 vote in the House. President George W. Bush will sign the measure into law, putting aside his objections with some provisions, a spokesman said.

The legislation "is a step, and I hope and expect an important step, towards putting our nation on the road to economic recovery," Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat who introduced the bill, said from the Senate floor as debate wrapped up.

The legislation is the most comprehensive package considered by Congress to curb a surge in foreclosures, plunging housing prices and market turmoil stemming from the worst housing recession since the Great Depression. U.S. foreclosure filings more than doubled in the second quarter from a year ago.

The foreclosure-prevention measure, unveiled in March, sped through Congress this week after Treasury Secretary Henry Paulson asked lawmakers to tuck in a provision he proposed earlier this month that would let him inject capital into Washington-based Fannie Mae and McLean, Virginia-based Freddie Mac through government loans and investments.

Paulson spent the past week lobbying Congress for support of the proposal, which creates a tough regulator for the two companies, and persuaded Bush to drop veto threats.

"Oversight of the housing government sponsored enterprises and the new temporary authorities requested by Secretary Pauslon are urgently needed now, and they'll contribute to confidence and stability in housing and financial markets," White House spokesman Tony Fratto said Saturday in an e-mailed statement.

The House voted 272-152, with 149 Republicans opposed, to approve the bill.

The bill would also increase the loan limit at Fannie Mae and Freddie Mac to US$625,500 from US$417,000 in high-cost areas. It raises the nation's debt limit to US$10.6 trillion from US$9.816 trillion to accommodate the Paulson plan.

Senator Kay Bailey Hutchison, a Texas Republican, voted against the bill. Fannie and Freddie "have demonstrated spending habits that should not be underwritten by American taxpayers," Hutchison said.

The centerpiece of the legislation would create a new program at the Federal Housing Administration to insure up to US$300 billion in refinanced 30-year fixed loans for about 400,000 borrowers struggling with their monthly payments after loan holders agree to cut their mortgage balance.

The measure would offer US$15 billion in tax breaks, including provisions offering the equivalent of interest-free loans worth up to US$7,500 for first-time homebuyers. States would be able to offer an additional US$11 billion in mortgage revenue bonds to refinance subprime loans.

Other provisions would give states US$4 billion to buy up foreclosed properties, create a new affordable housing program financed by Fannie Mae and Freddie Mac and offer US$180 million for mortgage counseling programs. 

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