Senate Passes Foreclosure Bill

The Senate has passed a foreclosure prevention bill by an 84-12 vote that includes a Federal Housing Administration modernization bill, $10 billion in revenue bonds for refinancing subprime mortgages, additional funding for foreclosure counseling, and tax provisions. The bipartisan foreclosure prevention package was cobbled together by Senate Banking Committee Chairman Christopher J. Dodd, D-Conn., and Sen. Richard C. Shelby, R-Ala. It includes $4 billion in Community Development Block Grant funds for cities to purchase and rehabilitate foreclosed properties, a $7,000 tax credit for homebuyers who purchase a foreclosed property, and a loan limit hike on veterans' loans. The tax section also contains a controversial provision that provides a net-operating-loss carry-back provision for homebuilders and others to deduct losses in 2008 and 2009 from their profits in prior years and receive a tax rebate. White House officials say they can't support the bill. But Sen. Dodd said more needs to be done and he wants to move ahead with another bill that expands the FHA to refinance more at-risk borrowers. Sen. Shelby said he wants to make sure Dodd's FHA expansion bill does not use taxpayers' funds to bail out speculators.