Randall Posted April 2, 2008 Share Posted April 2, 2008 Is anyone here subject to this mess? Anyone close to foreclosure? Senators Agree to Make Deal On Housing Compromise Could End Republican Resistance By Lori Montgomery Washington Post Staff Writer Wednesday, April 2, 2008; D01 Under pressure from voters to address the nation's housing crisis, Senate Republicans agreed yesterday to work with Democrats on a compromise plan to stimulate sagging home sales and help distressed homeowners avoid foreclosure. The agreement calls for Senate Banking, Housing and Urban Affairs Committee Chairman Christopher J. Dodd (D-Conn.) and the committee's ranking Republican, Sen. Richard C. Shelby (Ala.), to lay out a bipartisan substitute today for a Democratic housing bill that is opposed by the Bush administration and was blocked in February by Senate Republicans. Although the two sides had not agreed on the specifics of a compromise yesterday, both offered proposals that would strengthen truth-in-lending laws for the mortgage industry, provide counseling to homeowners facing foreclosure and help some borrowers refinance their homes. The Senate had been scheduled to vote again yesterday on the existing Democratic bill, and Republican leaders were prepared to block it again. But senators returned from a two-week break marked by the government rescue of a major Wall Street investment bank and growing anxiety over the economy among their constituents, and some Republicans argued that it was time to start working together. "Unless every member of the Senate was in a cave over the two-week recess, it's pretty obvious that gas prices and housing crisis are the two most important issues to the American public," said Sen. Johnny Isakson (R-Ga.), a former real estate broker who was among those urging Republican leaders to stop blocking the legislation. "You can play that game when it doesn't matter. But people's lives, their fortunes, their largest single asset is at stake." "We don't want to sit on the sidelines," said Sen. John Cornyn (R-Tex.). The $30 billion rescue of investment bank Bear Stearns by the Federal Reserve Board in mid-March "got everybody's attention," he said. Democratic leaders welcomed the agreement, saying it demonstrates the urgency of the economic difficulties that are forcing nearly 8,000 homeowners into foreclosure every day. And the Senate voted to ratify the deal, voting 94 to 1 to permit a debate on housing legislation. Sen. Jim Bunning (R-Ky.) was the lone "no" vote. "I am confident and very, very hopeful that this is going to be a breakthrough," Majority Leader Harry M. Reid (D-Nev.), whose state has been among the hardest hit, said immediately after the vote. "The time has come for us to legislate, not continue our bickering." It was unclear yesterday exactly what shape the compromise would take. Democrats are pressing to include the most contentious provision of their bill, to give bankruptcy judges the power to cut interest rates on troubled subprime mortgage loans written in recent years. Under current law, bankruptcy judges are prohibited from modifying mortgages on a person's principal residence. President Bush and other Republicans say rewriting the bankruptcy code would prompt lenders to tighten their standards and raise interest rates. Several Republicans said they would continue to oppose the bill unless the bankruptcy provision is removed. Democrats also hope to keep a proposal to provide $4 billion to communities to buy and redevelop properties in foreclosure. They say the money is needed to prop up neighborhoods hit hard by the housing crisis and prevent home values from spiraling further downward. The White House also opposes that provision, arguing that it would be too expensive and would bail out lenders and speculators but offer little help to struggling homeowners. There are many areas of agreement between the two parties. Both want to provide up to $10 billion to finance tax-exempt bonds that could be used to refinance distressed subprime mortgages. Both sides want up to $200 million in additional spending for housing counselors to help troubled borrowers at risk of foreclosure. Democrats and Republicans both want to strengthen truth-in-lending laws to make sure that future borrowers considering adjustable-rate mortgages are told the highest monthly payments required under their loans. And both sides agree that businesses struggling because of the housing downturn, including home builders, deserve tax breaks. In addition, Sen. Charles E. Schumer (D-N.Y.) said Democrats are eager to take a look at a proposal drafted by Isakson to offer families who purchase certain homes a $15,000 tax credit. Under the measure, buyers who act during the next year to purchase a newly built home, a house in foreclosure or a house whose owner has defaulted on a mortgage would be able to claim a $5,000 annual credit for the next three years. Isakson said Congress adopted a similar temporary tax credit in 1975, which worked well to motivate home buyers. The proposal would cost $14.5 billion over the next five years. Meanwhile, Dodd has said he hopes to include a more ambitious plan to permit the Federal Housing Administration to guarantee up to $300 billion in risky mortgages as an inducement for bankers to forgive some of the debt. Under that proposal, lenders would be encouraged to work with borrowers who, because of falling home values, owe more on their mortgages than their homes are worth. FHA insurance would be available on refinanced mortgages if borrowers could afford the new payments and each loan amount did not exceed 85 percent of the home's current value. Lenders would be required to accept the new loan as full payment on the old mortgage and to forgive any fees and penalties. That idea, also promoted by House Financial Services Committee Chairman Barney Frank (D-Mass.), is gaining support among Republicans. The Bush administration is working on a plan to achieve some of the same goals through administrative changes; yesterday, several Republican senators said they are willing to consider the idea. "As the economy gets worse," Schumer said, "even some of the Republicans are realizing that they can't be Hoover-like and just say, 'Do nothing.' " Staff writer William Branigin contributed to this report. Quote Link to comment Share on other sites More sharing options...
Egret Posted April 2, 2008 Share Posted April 2, 2008 Their pitching is still going to stink. Quote Link to comment Share on other sites More sharing options...
Jimmy Neutron Posted April 2, 2008 Share Posted April 2, 2008 What a load of crap - more government bailouts. Quote Link to comment Share on other sites More sharing options...
wiegie Posted April 2, 2008 Share Posted April 2, 2008 In addition, Sen. Charles E. Schumer (D-N.Y.) said Democrats are eager to take a look at a proposal drafted by Isakson to offer families who purchase certain homes a $15,000 tax credit. Under the measure, buyers who act during the next year to purchase a newly built home, a house in foreclosure or a house whose owner has defaulted on a mortgage would be able to claim a $5,000 annual credit for the next three years. wow--I would like that. (As a potential homebuyer--not necessarily as an objective economist.) Quote Link to comment Share on other sites More sharing options...
Kid Cid Posted April 2, 2008 Share Posted April 2, 2008 Ahhh yes, so once again only those Americans capable a of managing their money and paying their bills on time should take it up the pooper. Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted April 2, 2008 Share Posted April 2, 2008 Ahhh yes, so once again only those Americans capable a of managing their money and paying their bills on time should take it up the pooper. true dat Quote Link to comment Share on other sites More sharing options...
Double Agent Posted April 2, 2008 Share Posted April 2, 2008 Ahhh yes, so once again only those Americans capable a of managing their money and paying their bills on time should take it up the pooper. Isn't that the American way? We've been punishing those who contribute to the economy and rewarding those that don't for a long time. Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted April 2, 2008 Share Posted April 2, 2008 I wonder if you can get that credit on just one house or multiple houses? If you could get it on multiple houses, it might make flipping houses real appealing. Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted April 2, 2008 Share Posted April 2, 2008 but wait, i thought everyone should be able to own a house. its amerika!!! Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted April 2, 2008 Share Posted April 2, 2008 (edited) Ahhh yes, so once again only those Americans capable a of managing their money and paying their bills on time should take it up the pooper. well, conceivably anyone who owns a home would benefit, as it would stabilize the housing and mortgage markets. but I basically agree with everyone else that it stinks. seems like the country would be a little better off if the government would incentivize SMART behavior rather than STUPID behavior. or just started incentivizing behavior a lot less all around. Edited April 2, 2008 by Azazello1313 Quote Link to comment Share on other sites More sharing options...
Kid Cid Posted April 2, 2008 Share Posted April 2, 2008 well, conceivably anyone who owns a home would benefit, as it would stabilize the housing and mortgage markets. but I basically agree with everyone else that it stinks. seems like the country would be a little better off if the government would incentivize SMART behavior rather than STUPID behavior. or just started incentivizing behavior a lot less all around. I agree. It's not the net benefit that may come from such action (and I stress may) but the message taken away by the public. Hey, if I screw up, the gov't will come make everything better just like mommy used to. Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted April 2, 2008 Share Posted April 2, 2008 I agree. It's not the net benefit that may come from such action (and I stress may) but the message taken away by the public. Hey, if I screw up, the gov't will come make everything better just like mommy used to. Unfortunately this is just the sort of attitude that the New Deal has ingrained in much of our society. Quote Link to comment Share on other sites More sharing options...
Ramhock Posted April 2, 2008 Share Posted April 2, 2008 This posturing is very mostly for show. The % of homeowners that will helped, with whatever they come up with, will be < 5%, IMO. Quote Link to comment Share on other sites More sharing options...
westvirginia Posted April 2, 2008 Share Posted April 2, 2008 This posturing is very mostly for show. The % of homeowners that will helped, with whatever they come up with, will be < 5%, IMO. First of all, everything politicians do is for show. Whether it actually helps, hurts, whatever is just a side benefit. Secondly, what are you angry at? The folks above are right - only those who made poor decisions in their financing or payments - whatever. Why should those who make good decisions pay to help even 5% of those who don't? Quote Link to comment Share on other sites More sharing options...
Ramhock Posted April 2, 2008 Share Posted April 2, 2008 Secondly, what are you angry at? The folks above are right - only those who made poor decisions in their financing or payments - whatever. Why should those who make good decisions pay to help even 5% of those who don't? Angry because I am old and tired of the posturing. Quote Link to comment Share on other sites More sharing options...
westvirginia Posted April 2, 2008 Share Posted April 2, 2008 Angry because I am old and tired of the posturing. Ahh, thought you were angry because it wasn't going to help enough people. As for old, well, it beats the alternative, right? Quote Link to comment Share on other sites More sharing options...
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