Who Does the Housing Bill Help?
Find out who reaps the benefits of the housing bailout.
July 27, 2008 — -- The $300 billion housing bill the senate passed Saturday could help more than just those facing foreclosure. The bill, which passed with a 72-to-13 vote, could make things easier for first-time homebuyers, as well. President Bush is expected to sign it into law this week, and not a moment too soon, supporters say, since foreclosure filings are up 121 percent over this time last year.
"Today, at long last, a ray of hope, a chance to turn the page on the housing crisis and begin a new chapter," said Senate Majority Leader Harry Reid, about the bill.
The new measure gives families on the verge of foreclosure a chance to refinance into more affordable loans, gives troubled mortgage giants Fannie Mae and Freddie Mac government backing to avert a collapse, and gives financial counseling and legal services to struggling borrowers.
"We want to reduce foreclosures," said Massachusetts Rep. Barney Frank. "Not sorely or primarily to help the individual -- but to try to get this economy out of the problem that is in."
The bill was overwhelmingly popular on Capitol Hill and at the White House. And for some 400,000 homeowners struggling to pay their mortgages, it contains real help.
That's just a fraction of the 2.5 million homeowners at risk of foreclosure, and it does nothing for homeowners already in foreclosure, like Avery Salkey. Her Miami home goes up for auction next week.
"Where are we going to go? We have no one to help us," Salkey said.
Salkey may have already lost her home, but lawmakers hope this new bill may prevent millions from following suit.
Syndicated real estate columnist Elise Glink described how the bill would work on a practical level for new homebuyers.
"First-time homebuyers get a $7,500 tax credit -- tax credit being a dollar-for-dollar reduction on your tax bill that you pay,"said Glink.
"You're going to have to pay it back over the next 15 years at a rate of $500 a year," Glink added. "And if you sell your house before you've paid it off, you'll have to pay it off in full from the closing proceeds. Still, it's a big boost for first-time buyers ... for those making less than $75,000 a year."
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