House Democrats Target Aid To Homeowners As Senate Plan Showers Tax Breaks On Businesses

[Purveyor]

Source: Associated Press

WASHINGTON – Democrats are split over how to respond to the housing crisis, with House leaders focusing on helping homeowners facing foreclosure while the Senate moves to take care of businesses impacted by the subprime crisis.

The Senate could pass its bipartisan business-friendly measure, which showers some $25 billion in tax breaks on home builders and banks, as early as Wednesday. That's also when a key House panel is to consider a rival Democratic plan that instead steers tax breaks toward first-time home-buyers and investors in low-income rental housing.

The emerging rift clouds the prospects for a broader housing rescue plan that would have the government step in and insure $300 billion in restructured loans for homeowners staring at foreclosure. Rep. Barney Frank, D-Mass., the Banking Committee chairman, begins hearings on that measure Wednesday.
The House and Senate will ultimately have to reconcile competing versions of the plan.

House Speaker Nancy Pelosi, D-Calif., has made little secret of her distaste for the Senate's approach. “Hopefully, the balance will swing to being more in favor of the families who are in danger of losing their homes,” she told reporters last week.

The House plan would give first-time homebuyers a 10 percent credit – up to $7,500 – on the purchase of a new home. It is targeted toward lower earners, with those making $70,000 (or $110,000 for a couple) receiving smaller credits.

“We need to provide relief to the buyers and families themselves, not just the banks and builders,” Rep. Charles B. Rangel, D-N.Y., the Ways and Means Committee chairman, said Tuesday. “The House bill puts families first – offering a refundable tax credit to first-time homebuyers, essentially a zero-interest loan to help defray the cost of purchasing a house.”

Read more: http://www.signonsandiego.com/news/nation/20080408-1151-congress-housing.html

[LisaM]

1. $7500 is ten percent of a house exactly WHERE?

Where does one get these $75,000 houses?

I think we should help homeowners. But we also need to foster an atmosphere where people are satisfied with normal-sized houses, don't have zillions of kids, and people can't sell houses for 100% profit after two years.

Part of the housing crisis has to do with the greed of the buyers, IMO. I know a lot of people who are in houses that are way too big for them, with new kitches that cost $25,000 because they have to have granite countertops!

What are they going to do about people who have consistently been priced out of this inflated market?

[nels25]

5. My house is perfectly sized for me

and my family, just a scoosh over 1100 square feet, nice and cozy and great,

Built in 1926, I had to pay 130K for it 3 years ago (although I bet cash money it is not worth that now).

I did not buy it to make money with it. I BOUGHT IT TO LIVE IN IT!!

I agree with your post BTW, if a speculator takes it in the shorts than; to bad and so sad, you knew the risks going in.

OTOH: If some one got fleeced into spending more than they could afford or sweet talked into more home than they need or could handle, than perhaps they should merit some help.

[LisaM]

6. Agreed, the banks are bad actors in this

But when houses were more affordable, I made a very low income. Now housing prices are through the roof (median in Seattle is over $400K) and I am completely priced out. I will probably never own a house. All the new houses going up in my neighborhood (we rent what is essentially a tear down and it's tiny, probably 750 square feet) are way too big for their lots and cost well over $500K.

At some point, buyers should have said NO. I don't need 4000 square feet, and I don't need a kitchen that would adequately supply a moderate-sized restaurant, and we don't need one bathroom per person, oh, and by the way, I'm not going to pay you $165,000 for a $55,000 house.

That kind of greed has kept me on the outside of all this. If houses in this market went down to the equivalent (adjusted to inflation) of what they sold for in the 1970s, I could probably buy. But prices aren't going down. Even though there is a glut of houses on the market, people still rarely price under $300K and that's cheap.

[nels25]

10. I am sorry to hear that Lisa

I live on the state line of Wisconsin/Illinois. Property values are not quite as high in the general Milwaukee area as they are in other areas of the nation.

I will not comment on the major Chicago or their burb areas (shudder).

I could never have afforded a house above 150k, I know that people were buying houses in developments all over here (man you should have seen how many have cropped up in the last 10 years). But how in the world they can afford 225k or more (and that is on the low side for a new built home) is beyond me.

I knew I would have to buy old but as long as it was overall sound it did not bother me since this was my home anyway.

I wish there was some way that I could help you and others but all I can do is vote so that there is Democrat administration that takes power in January 09.

Hopefully things will get better.:yourock:
:hug:

[alstephenson]

2. How does a tax credit for BUYING a foreclosure property...

help homeowners already in default and in the foreclosure process? Providing a tax credit makes the foreclosure property more marketable, again assisting the poor lenders in liquidating their non-performing assets.:mad:

[formercia]

3. If a business is paying taxes, that means it's making money

and doesn't need a tax break.

Tax break is a non sequitur.

[nels25]

4. Just asking??

What about those of us who can at present pay for their homes (bought mine 3 years ago) but are being squeezed none the less by a weakening economy (see gas prices for an example).

And do not hand me this crock of crap about the shrubs so called tax rebate (which lucky me I get taxed next year, oh boy, oh boy:sarcasm: ).

I know the people in mortal danger of losing their homes need and should receive help, but a large portion of the rest of us are just barley treading water. we may need help also.

[Javaman]

7. I make no claim to being all that swift with economics, but...

what if and this is a big IF, all interest rates were frozen on the ARMs, then they were reset to the original interest rate and kept there.

What would happen?

[MadHound]

8. Oh yippee.

Once again, those of us who do the right thing, who do our research, educate ourselves, aren't greedy, don't get suckered into stupid shit are going to be bailing out both sides of this train wreck where greed met stupidity. All while we're having to deal with an ongoing economic meltdown.

Frankly I think that both sides in this mummer's play should suffer the consequences of their own greed and/or stupidity. Perhaps they'll learn a lesson and next time not be so greedy and/or stupid.

[benld74]

9. $25 billion in tax breaks on home builders and banks?!?!?!?!?

WTF. If this is bipartisanship, I'm a closet Repub!!!!!!!!!!!!!!!!!!!!!!!!!!!!!