Sun
WASHINGTON — Democratic leaders of the U.S. Senate offered a housing market rescue plan Thursday in a legislative effort to jolt the slumping economy.
Addressing a mortgage crisis that threatens to tip the economy into recession, lawmakers proposed letting some bankrupt homeowners erase a portion of their mortgage debt, which would modify existing bankruptcy law.
Businesses would get a tax break under the bill. They would be allowed to use losses incurred in 2006-2008 to offset income earned during previous years back to 2001, extending by three years an existing two-year loss carryback standard.
Housing finance agencies, which are run by state and local governments, would be allowed to use more money from mortgage revenue bonds to refinance subprime loans and provide mortgages for first-time buyers and rental housing.
Consumer groups would get $200 million to counsel borrowers facing foreclosure, while local governments would get $4 billion in federal grant money to buy, fix and resell foreclosed properties dragging down good neighborhoods.
A provision offered by Rhode Island Senator Jack Reed would set new disclosure standards for lenders and leave them liable to damages if they fall afoul of the standards.
The bill was introduced at a news conference by several Democrats, including New York Senator Charles Schumer.
© The Vancouver Sun 2008