Foreclosure Prevention Act Passes Senate
A bipartisan package of tax breaks and other means to help homeowners cope with the housing crisis was passed today by the Senate. Although the measure passed with an 84-12 vote, its supporters agree the bill leans too much in favor of homebuilders and does way too little to help borrowers at risk of foreclosure.
The bill incorporates a $7,000 tax credit for those who buy foreclosed properties, and $4 billion in grants for communities to buy and fix abandoned homes. However, the measure will be considerably redrawn by House critics who claim it does not help people in foreclosure enough.
“Quite candidly, what we have done does not quite live up to the title,” said Senator Christopher Dodd, D-Conn., Chairman of the Senate Banking Committee and the measure top sponsor. “We have more work to do. We do not do enough in preventing more foreclosures in the country.”
Democrats sought approval of ideas like giving people threatened with foreclosure the right to try for more favorable loan terms from lenders in bankruptcy courts. A proposal that will allow government to back up people who have refinanced their loans facing foreclosure has not won GOP approval yet.
The White House complained that the measure used taxpayer money that will bail out lenders saddled with foreclosures is not appropriate. The House will most likely reject key portions of the Senate bill, including $25 billion over there years in tax breaks for homebuilders that are losing business. Another plan was considered that would drop the idea of tax credits aimed at purchasers of foreclosures.
“This is just the beginning of the process,” Reid said. “This bill will go to the House. With the House and the White House we can come up with a piece of legislation fairly quickly.”
What “quickly” means is yet to be seen.
The Senate backed another $6 billion in unrelated tax breaks for renewable energy producers even though Senate rules say that tax cuts must be paid for elsewhere in the tax code.
The Bush administration conversely came up with other much narrower plans. Expansion of an existing FHA program will allow more borrowers who are facing big rate hikes to refinance to more affordable government-insured loans.
Like this article? Share it...
