Four months after Congress tried to rescue the economy with a $700 billion bailout for the financial industry, Republicans and Democrats are suddenly competing to bail out financially struggling homeowners.
Having spent hundreds of billions of dollars rescuing financial institutions, only to see the economy spiral even deeper into crisis, liberal and conservative economists and lawmakers are pushing to redirect the economic stimulus bill to what they say is the core problem: the housing market.
Senate Republicans are seeking new tax breaks and up to $300 billion in mortgage subsidies to attract homebuyers. Democrats want to spend at least $50 billion on federal programs aimed at reducing mortgage foreclosures.
Story continues below ↓advertisement | your ad here
The Obama administration is hammering out its own plan to spend $50 billion to $100 billion to prevent home foreclosures. And later this month, Democrats hope to pass a measure that would give bankruptcy judges the power to reduce monthly mortgage payments for homeowners who are in default.
There is a growing consensus among lawmakers in both parties that the deepening collapse of the housing market is at the heart of the country’s acute economic downturn.
But beneath the consensus over helping the housing market, there are huge differences over who should benefit under the competing plans. Democrats want to aim money directly at people in the greatest distress; Republicans want to aim money at almost all homebuyers, on the theory that a rising tide will eventually lift all boats.
“Most people recognize that housing itself is at the root of the current economic downturn,” said Mitch McConnell of Kentucky, the Senate Republican leader. “We should fix this problem before we fix anything else.”
Countrywide has declined my second attempt at a loan modification because I can’t afford the payments based on my take home pay (which is the same, incidentally, as when I purchased the place.) They still are not offering a principle reduction via the Help For Homeowners plan, and they do not know when that will be available. So, I’m back to having a forclosure happen unless they are willing to work something else out. Time for another call to the hope line.
The Hope Now Alliance (888-995-HOPE) provides referrals to counselors approved by the U.S. Department of Housing and Urban Development.
Result: No hope. Countrywide is not doing principle reductions at this time. Next step is I get reviewed by laywers for a foreclosure, I get a sale date, then I get 60 to 9o days to get out. Meanwhile, I’ve put the place back on the market.