Senate Passes Bill To Protect Home Owners After Removing Protections

The Senate on Thursday passed (84-12) HR 3221 giving tax breaks to builders and lenders while providing no help to struggling homeowners.

The so called housing crisis bill had already been stripped of actions that would help homeowners facing foreclosure. The provision that would have permitted bankruptcy judges to modify interest rates and reduce mortgage balances to the current value of a home was removed a week ago. Nothing in the bill facilitated refinancing or modification of mortgages to stem the continuing tidal wave of foreclosures. The only so called help for homeowners was money for "counselors".

Home builders and financial companies however, got billions. Money for buyers of foreclosed property and money for local governments to buy foreclosed homes is in the bill. Those actions would artificially inflate the value of the homes already foreclosed on by financial companies and remove the chief motivation for financial companies to work out loan modifications with homeowners.

While the problem of a large inventory of foreclosed homes is real, subsidizing their purchase reduces the pain felt by companies that choose to evict families and shifts the balance in favor of foreclosure.