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New Housing Bill Criticized As Scant Help for Distressed
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Alys Cohen, a staff attorney at the National Consumer Law Center, said the package will do little to stem foreclosures. "What we've got right now is basically voluntary measures and incentives. . . . That's it."
Even the $100 million set aside for housing counselors received only a half-hearted endorsement from some counseling groups, which say they need more options to offer borrowers.
"We want to be able to counsel them into something that's going to help them and get them into good loans," said John E. Taylor, chief executive of the nonprofit National Community Reinvestment Coalition. "But you've got to stop the bleeding before you pump more blood into the system."
On Capitol Hill, the Senate bill's supporters acknowledged its shortcomings but insisted it was useful.
They said the proposed property tax deductions for families and individuals this year would benefit more than 28 million mostly low-income households that pay property taxes but cannot deduct them on their federal tax returns because they do not itemize.
The proposal offers "broad-based tax relief for low-income individuals and those who have already paid off their mortgages," said Senate Finance Committee Chairman Max Baucus (D-Mont.).
The $7,000 tax credit for those who buy foreclosed properties should stimulate demand for them and prevent their prices from falling further, said Sen. Johnny Isakson (R-Ga.).
All this sounds "wonderful" to Elizabeth Garechu of Falls Church, who is shopping for her first home and is more than willing to consider a foreclosure. She wants to move fast, when interest rates are low.
"I'm looking for any kind of break I can get, any kind of incentive I can get, anything at all to get my foot in the door," said Garechu, a waitress and single mother.
Other house-hunters were less enthusiastic, including David Meeker, 40, who is looking for a home in Prince William County in the $500,000 to $600,000 price range.
"A $7,000 tax break, quite frankly, is not going to do a whole lot for a buyer," Meeker said. "It's not cash that's available for the transaction. It comes after the fact."
In the Washington area, where the median price of a home is $420,000, the tax break is "peanuts," said Jim Whitehead, a real estate agent at Lord & Saunders in Woodbridge.
