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Tuesday, April 22nd, 2008 Subscribe To Our Feed

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AP: WASHINGTON (AP) — Democratic and Republican senators have crafted a package of tax breaks to help businesses and homeowners weather the housing crisis and head off deeper economic distress. In the House, Democratic leaders regard the Senate proposal as skewed toward businesses rather than homeowners.
It also offers $100 million for pre-foreclosure counseling and stronger loan disclosure requirements.
The $25 billion tax break the plan offers to homebuilders and other businesses absorbing heavy losses and the energy tax package were both dropped from an economic rescue plan enacted in February. The measure calls for a long-awaited modernization of the Federal Housing Administration that would enable more homeowners to refinance into loans backed by the Depression-era agency.
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It includes $10 billion in tax-free mortgage revenue bonds to help homeowners refinance subprime loans, a move endorsed by President Bush.
A House bill takes a far different tack, steering tax breaks toward first-time home-buyers and investors in low-income rental housing. The Bush administration countered those plans Wednesday with its own, far narrower, proposal. It would expand an existing FHA program to allow more homeowners who are facing large rate hikes to refinance into more affordable government-insured loans.
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From the NYT: House Democrats, meanwhile, said they would pursue their own, more expansive homeowner assistance bill, and would support only a few provisions in the Senate measure.
In a draft of testimony to be delivered before the House Financial Services Committee on Wednesday, Brian D. Montgomery, the commissioner of the Federal Housing Administration, said the administration would look to expand a program to help refinance the mortgages of borrowers struggling with subprime adjustable-rate mortgages. The relatively modest Senate bill contains tax breaks for struggling businesses, including home builders; a $7,000 tax credit for buyers of foreclosed properties; $10 billion in tax-exempt bonds for local housing agencies to refinance troubled loans; $4 billion for local governments to buy foreclosed properties; and $100 million to counsel borrowers.
Ms. Perino also suggested that the Senate bill could be irrelevant, citing a desire of many House Democrats to go further. The comments from the White House seemed to blindside Senator Mitch McConnell of Kentucky, the Republican minority leader, who earlier in the day repeated his strong support for the housing bill.
House Democrats did not dispute Ms. Perino’s assertion that they planned to pursue a more aggressive rescue plan for homeowners.
House Republicans issued a set of House Principles on Tuesday that they said should frame the debate over any legislation. The housing market needs a jump-start, not a bailout.”
A majority of Democrats favored government help for troubled homeowners; a majority of Republicans opposed it.