Senate Bill To Help Foreclosure Crisis Faces Strong Criticism

Posted on April 14, 2008
Filed Under Foreclosure Homes |

A bipartisan bill was passed by the Senate allowing for tax breaks among other measures to help primarily construction business community. The house owners would also benefit. 84 voted in favour and 12 against but nevertheless even those supporting it admitted that it has given priority to the business community and done little for the house owners who are victims of the foreclosure crisis.

Generous tax breaks have been offered to the construction business community. Also those who buy repos houses will get monetary incentives. In the favoured circle are communities that buy and repair foreclosed units before trying to sell them. Facing strong criticism, in all likelihood, the bill is going to be rewritten.

Senator Christopher Dodd (D-Conn.) said that in reality what has been done does not justify the title of the bill. He is the chairperson of the Senate Banking Committee. There is a lot yet to be done. Till now the programme initiated by Bush to help the foreclosure victims has been able to benefit only 2,500 instead of the targeted figure of 240,000. Thus less than 1% has benefited. By the end of the year another 100,000 will in all probability get help. The FHASecure programme has helped 150,000 foreclosure victims.

The difference is because of FHA refinancing since the start of the programme last September. Many have been left out who otherwise would have benefited had the programme been launched earlier. The comment came from a spokesperson of HUD.

Bush and the Democrats in the Congress are crossing swords about how broad should be the approach of the government towards solving the foreclosure crisis. About 2 million Americans are facing foreclosures in 2008. The Democrats in the Senate could not get an approval for their proposal that borrowers facing foreclosures have a right to seek favourable terms from the lenders in the bankruptcy courts. Neither did the plan of government support for refinancing loan get any support. Without going for an outright veto the White House nevertheless has opposed the proposals. The argument put forward is that this will only make foreclosure related matters worse.

Foreclosure crisis has gone out of hand with the lenders having eaten more than they can digest. The whole country is dotted with abandoned houses that are attracting arson and criminal activity. It is bringing down the property value of entire localities and thus affecting those not caught in the foreclosure net.