Washington ? They’re trapped in loans they can’t afford and saddled with more debt than their homes are worth.

Hundreds of thousands of homeowners ensnared in a double-whammy of subprime mortgage rate resets and plummeting house values could be helped under a plan passed by the House on Thursday.

But first, Democrats have to counter objections from President Bush and congressional Republicans, who say more prudent homebuyers and renters shouldn’t be called upon to bail out borrowers who gambled on ever-rising housing prices and lost.

“The American people don’t want to make their neighbor’s payment when they’re having trouble making their own,” said Rep. Randy Neugebauer, R-Texas.

Defying veto threats from Bush, the House voted to let the Federal Housing Administration take on up to $300 billion in new mortgages so that financially strapped borrowers facing foreclosure could refinance.

The bill was approved by a vote of 266-154, with 39 Republicans – mostly from areas suffering worst from housing woes – supporting it.

The plan by Rep. Barney Frank, D-Mass., is the centerpiece of a broader package of bills approved Thursday that Democrats say will prevent more foreclosures and help homeowners and communities deal with the fallout from the mortgage meltdown.

“We are in a recession, and the major cause of that is the subprime crisis,” said Frank, the House Financial Services Committee chairman. “Diminishing the number of foreclosures is in the interest not simply of those who will avoid foreclosure, but people in their neighborhood, (in) the cities in which they are located, and the whole economy.”

The measure is targeted at homeowners facing default, including many who owe more than their houses are worth.

For instance, a homeowner who owes $290,000 on a house now worth $225,000 could refinance into an FHA-backed loan if the mortgage holder was willing to take a loss of about 36 percent. The borrower’s monthly mortgage payments would fall from $2,200 to about $1,200.

Loan holders would have an incentive to participate, proponents believe, because the alternative would be costly foreclosures, which can involve losses of 50 percent or more.