Senate bill addresses credit crunch

A new compromise Senate housing bill will “deal directly with the epicenter of the economic crisis, which is the housing crisis,” Senate Banking Committee chairman Christopher Dodd, D-Conn., said today. “It is a far cry from everything we need to do,” but it will help keep homeowners in their homes, Mr. Dodd told reporters. The bill allows people who cannot normally take property tax deductions to take a deduction this year of up to $1,000 per family. It also provides a $7,000 tax break over two years for buyers of foreclosed homes. Funds would be increased for credit counseling and expanded refinancing opportunities and $4 billion would be provided for Community Development Block Grants to purchase foreclosed properties for resale or rent. The latter provision will help relieve the oversupply of housing on the market, Mr. Dodd said. As many as 7,000 to 8,000 homeowners are entering foreclosure daily, and quick action is needed, he said. “This is a growing problem. It’s not getting less. It’s a contagion spreading to other aspects of our economy,” Mr. Dodd said. The Senate will take up the bill next week, he said. The bill also includes provisions improving disclosures and it provides $1.6 billion for mortgage revenue bonds, which subsidizes the cost of borrowing for low-and moderate-income borrowers. “We can get this bill done and move forward,” Mr. Dodd said.