(Homebuilder Winners article updated for closing prices)WASHINGTON D.C. ( TheStreet) -- The House of Representatives voted down a mortgage relief bill that would have allowed overleveraged home owners to reduce payments through an empowered bankruptcy court. One of the big arguments against the bill had been that by creating more risk for lenders of receiving less repayment from foreclosed properties, interest rates would have to be increased. The historically low rates that exist today have been one of the few helpful economic engines for the homebuilding sector as it slumps toward recovery. And there have been arguments that as rates inevitably rise, that could make the pace of homebuilder recovery harder to peg. With the death of the latest attempt by Congress to give the bankruptcy courts more leniency with foreclosed home owners, in the least, the homebuilders will not face an immediate threat of a rapid rate rise in response to Congressional action. It does not necessarily mean things look bright for the homebuilders. Indeed, there are many reasons to fear a protracted road to recovery, but it's a minor piece of good news to end the week. Many of the big homebuilder shares were up on Friday afternoon, too. Ryland Group ( RYL), NVR ( NVR) and M.D.C. Holding ( MDC - Get Report) had the biggest gains. KB Home ( KBH) led the big homebuilders with a gain of 2.6% on Friday. Ryland was up 2.1%; NVR 1.6%; and M.D.C. Holdings, a little over 1%. Lennar ( LEN)was also up in the afternoon. One analyst who covers the homebuilders, but did not want to be quoted since he had not seen the congressional vote, said, "To the extent that lenders would have lost their rights by a third-party and be summarily granted 80 cents on dollar, that would have implied a level of increased risk and the rates would go up, that logic is pretty much irrefutable."
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