I recently read this article in the Sun Sentinel, reproduced from the Associated Press - Apparently, what started as an effort to relieve distressed homeowners, will end up being another tax break for big business.
Sadly, what initiated the whole thing, which is alleviate homeowners plagued by high-interest mortgages, was quickly forgotten or dismissed in the process.
HOMEOWNERS SHUT OUT
Measure offers no foreclosure aid
By ANDREW TAYLOR | The Associated Press
April 11, 2008
The measure is a bipartisan package of tax breaks and other steps designed to help businesses and homeowners weather the housing crisis, but it has nothing to offer people who can't afford their mortgages or owe more on their homes than they're worth.
"Quite candidly, what we've done does not quite live up to the title," said Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee and the measure's top sponsor. "We have more work to do. We do not do enough in preventing more Foreclosures in the country."
The bill passed by an impressive 84-12 vote, but even supporters such as Dodd acknowledge it's tilted too much in favor of businesses such as home builders.
The plan combines large tax breaks for homebuilders and a $7,000 tax credit for people who buy foreclosed properties, as well as $4 billion in grants for communities to buy and fix up abandoned homes.
The measure will be significantly redrawn by House critics who say it favors business over borrowers.
Democrats failed to win approval of ideas such as giving people threatened with losing their homes the right to seek more favorable loan terms from their lenders in bankruptcy courts. At the same time, a proposal to have the government back up refinanced loans for people facing Foreclosure has yet to win GOP support.
The White House opposes the plan but has not issued an explicit veto threat. It says parts of the legislation would make the problem worse by depressing some home values, and that the measure inappropriately uses taxpayer money to bail out lenders saddled with foreclosed houses.
The House is likely to reject key portions of the Senate measure, including $25 billion over three years in tax breaks for money-losing businesses such as home builders. A plan adopted Wednesday by a key House panel dropped that idea as well as the tax credit for purchasers of foreclosed homes.
Rep. Barney Frank, D-Mass., the Financial Services Committee Chairman, said the tax credit was "like paying a dog to eat a bone," and called the business tax break "a mistake."
Senate Majority Leader Harry Reid, D-Nev., acknowledged that changes will be needed in upcoming talks with the House and the White House.
"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."
Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
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