From AP:
"Senate leaders announced an agreement Wednesday on legislation to ease the slumping housing market and help millions of families threatened by foreclosure.Lots of quotes from all sides at the link.
The scaled-back proposal released by Majority Leader Harry Reid, D-Nev., and GOP leader Mitch McConnell of Kentucky contains an amalgam of ideas aimed at boosting demand for housing and helping homeowners saddled with subprime mortgages avoid foreclosure.
The plan contains $4 billion in grants to local governments to buy and refurbish foreclosed homes, new authority for states to issue bonds to be used to refinance subprime mortgages and a $7,000 tax credit for people buying new homes or properties in foreclosure.
. . .
Reid said he hoped the measure could quickly pass, though it faces a flurry of amendments from senators in both parties".
12 comments:
As always the devil is in the details. Who pays for this? What purpose does having local governments buy up property serve? Will they sell them themselves? The tax credit idea seems like the best on the face, but the article does a decent job noting that it essentially is putting the money in the pockets of the developers, banks, et al. If a $7000 tax credit will get the house sold, so will a $7000 price reduction. Or in this case a $3500 price reduction and another one in 2009.
Yep, they might as well write the banks and homebuilders a check.
Obviously they have earned it with all their hard work these last few years.
What pork.
Build infrastructure! e.g., the rail to Dulles... (Yes, pork, but at least of long term advantage.)
Got Popcorn?
Neil
"Who pays for this?"
This is America....it's the poor and middle class.
From the Article...
"The measure also contains a provision dropped from February's stimulus measure that would permit homebuilders and other money-losing businesses to reclaim previously paid taxes"
hmmmmm....interesting.
"Republicans forced Democrats to drop efforts that Zandi and other economists said might have proven more effective in alleviating the crisis, including a controversial plan opposed by banks and their GOP allies to change bankruptcy laws to help borrowers trapped in subprime mortgages keep their homes."
There it is....no walking away this time, folks.
".....to provide a tax credit to people buying foreclosed or newly built homes"
So why would I buy a brand new home?
If this thing doesn't work it could wreck the "free market" for YEARS to come.
Stay tuned.
If this thing doesn't work it could wreck the "free market" for YEARS to come.
Valerie: [aside, to Max] Do ya think it'll work?
Miracle Max: It would take a miracle.
Together: B-Bye!
If they can make a compelling argument that this fix will help stabilize the economy, boost consumer confidence overall and consequently save jobs, then they should do it. If we can spend a $1 billion a day or so trying to bring democracy to a country that doesn't want it ....
The parts of this bill that made it through were the ones the big banks and home builders wanted.
This bill does not really help people who are losing their homes. What it does is help home speculators get back into the biz by buying new or foreclosed properties to flip.
I'm always amused by this quote:
"Who pays for this?"
This is America....it's the poor and middle class.
From Newsweek:
Congress’ Joint Economic Committee disclosed that the richer half of the American population pays nearly 97 percent of income taxes. Most of that, 54 percent, is paid by those in the top 5 percent, Investor’s Business Daily (IBD) disclosed.
We don't really pay for these programs, rich people do. It just hurts us more.
"Congress’ Joint Economic Committee disclosed that the richer half of the American population pays nearly 97 percent of income taxes. Most of that, 54 percent, is paid by those in the top 5 percent, Investor’s Business Daily (IBD) disclosed."
This has nothing to do with income tax.
The Senate plan is a corporate welfare package that will stack the deck even more against those who can least afford it - the poor and middle class. It was this group of people who were allowed to roll the dice and who, for the most part, lost their shirts.
The "Plan" is no different than standing at a roulette table and putting all of your $$$ on one number and losing.....and then going back to the casino and expecting them to make you whole again so you can gamble more. If your a corporation this is OK but if you are an individual this is not OK.
The corporatocracy wanted a free market and they got it. They made a bet and lost. Deal with it.
Buying a foreclosure -
I wonder how many people have rebought their own foreclosed home? haha
counties/cities buying homes -
will they rent them out?
how much of a loss will they take on the sale?
who's going to buy a county owned home other than at a discount? (maybe public service emps, police, firefighters, teachers?)..
"who's going to buy a county owned home other than at a discount?"
More importantly... who at the county level is even sufficiently capable to manage such a program? What are they going to do? Recruit some local realtor and tell them to go out and find them some good deals?
I can guess how well that would work out.
Governments are generally terrible at this sort of thing. In the end they are likely to buy the wrong houses at the wrong prices and spend far more than they thought they would for far less.
Buying and fixing up foreclosed houses takes some actual expertise, something the government isn't going to have.
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