Both Democratic and Republican leaders in the U.S. Senate announced this evening that they have agreed in principle on a housing stimulus bill. The bill calls for $4 billion in grants for state and local governments to buy foreclosed homes, a temporary $7,000 tax credit for those who buy either new or foreclosed properties, more money for counseling for homeowners facing foreclosure, and the ability for homebuilders to recover taxes already paid on built properties.
Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY) issued a joint statement praising the bill. “Senior Senate Democrats and Republicans have reached an agreement in principle to strengthen the economy by addressing the nationwide foreclosure crisis. Getting to this point has required compromise by all sides. This is a solid, bipartisan start to keeping families facing foreclosure in their homes, helping other families avoid foreclosures in the future, and helping communities already harmed by foreclosure to recover.”
I disagree with the Senators’ statement. This bill actually does very little for people who are facing foreclosure. The chairman and ranking member of the Senate Committee on Banking, Housing and Urban Affairs, Sen. Chris Dodd (D-CT) and Sen. Richard Shelby (R-AL) were less enthusiastic about the bill then the two leaders were. Their statement said in part, “The package that we agreed to is not perfect, nor will it solve all of the problems that the economy and American homeowners are facing today. But it is an important step, and sends a strong message to the American people that Congress is willing to put aside our partisan differences and come together to tackle the challenges at hand.”
I think that Dodd and Shelby have it right. This bill has more to do with giving the appearance of doing something in an election year, than really trying to work out a solid bill that would help at risk homeowners. The White House has expressed reservations about some of the provisions of this bill, and when the Bush administration comes out on record wondering how much this bill will really help homeowners, then it is a pretty safe bet that this is going to be one weak piece of legislation.
Dodd Statement:
http://dodd.senate.gov/index.php?q=node/4351
Reid Statement:
http://democrats.senate.gov/newsroom/record.cfm?id=295404&
While I have to take a docket dive into the wording of this bill, I’m not entirely sold on it. I understand there are substantial needs to assist those facing foreclosure after the Fed and other unrulies ultimately got them into the tough spot in the first place. (Side note: I don’t subscribe to the “blame the victim” position of the the people should have known better. Buying a home is the American dream and if there is any true way to get to it, people will take it. Additionally I’ve been through the whole home loan dance…you think figuring out legal and legislative language and bills is hard, try mortgage contracts).
The buy up by state and local governments of foreclosed properties and the amount of money that is being funneled in is of a great deal of concern for me. Not that the people don’t deserve some compensation after being had, but the country is broke and the dollar is sinking and this will only make matters worse. Also the holding of assets by governments has always made me cringe, especially if they are originally privately owned properties and assets. If the language of the bills make the government the ultimate lien holders of an already occupied property, that is really cause for concern.
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