| Page 2 of 2 < |
Senators Agree to Make Deal On Housing
|
TOOLBOX
   Resize
COMMENT
 Discussion Policy
 CLOSE
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Who's Blogging  |
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.
