Foreclosure Package Tilts In Favour Of Housing Industry
Filed under: Foreclosure
Both Democrats and Republicans in a hurry to alleviate the foreclosure crisis sweeping the nation, came to an agreement over a package. The latter will allow for billions in tax rebates to the house building industry but little for the besieged house owners. After poring over the details of the bi-party agreement a bill was on the cards that negates the most bold steps suggested to battle the foreclosure menace – the most important being the Democrat proposal to allow bankruptcy judges to modify loans taken on primary residences.
The final agreement showed a sharp fall back from what was originally envisaged to solve the foreclosure crisis. $4 billion grants would be sanctioned for cities to purchase foreclosed houses, short- term tax relief ranging up to $7,000 for those who buy foreclosed houses and fresh tax deductions for any American house owner. The package will cost the economy $15 billion during the coming decade.
The core problem centres around those families who cannot repay house mortgage loans. They will benefit by a mere $100 million apportioned to expansion of foreclosure related counseling and greater freedom for local housing bodies to avail of tax free bonds to refinance sub-prime loans. Construction bodies and other related bodies suffering loss because of the tardy economy will benefit from $6 billion tax cuts.
Democrat Harry Reid, the majority leader of the Senate was all praise for the agreement as a ‘robust package’. On the contrary the principal architects of the deal, Democrat Chris Dodd and Republican Senator Richard Shelby were cautious in their comments saying that the move hardly makes any positive step to help either side in the foreclosure problem. Dodd termed it as ‘confidence-building measure’ that has attempted to locate the ‘common ground’ between the two political parties. Dodd and Shelby said in a joint press conference that that they would work in tandem during the forthcoming weeks. There are plans being mulled over to allow the FHA to underwrite $300 billion in new low cost mortgages for those battling the foreclosure crisis.
A good number of economists, politicians and legal personnel reacted adversely to the bill. They said that about 8,000 families per day are being infected by the foreclosure virus and without a dramatic change in the mortgage system they will not be able to survive. The bipartisan endeavours do not seem to target those who are really in need of help.
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