Today, Congressman Walz joined a bipartisan majority of his colleagues in passing a package of bills to address the housing crisis that has contributed to America's economic slowdown and is threatening millions of American families with foreclosure.
Walz said that the two bills, the Neighborhood Stabilization Act of 2008 and the American Housing Rescue and Foreclosure Prevention Act of 2008, are together the most comprehensive effort by Congress to date to address the housing crisis and to help American families hold on to their homes.
"This package of housing measures will help families facing foreclosure keep their homes, help other families avoid foreclosures in the future, and help the recovery of communities harmed by empty homes caught in the foreclosure process," said Walz. "These bills are a way to ensure that entire neighborhoods aren't affected by the wave of foreclosures that has swamped many middle-class Americans."
In a speech this week, Federal Reserve Chairman Ben Bernanke argued that: "High rates of delinquency and foreclosure can have substantial spillover effects on the housing market, the financial markets, and the broader economy. Therefore, doing what we can to avoid preventable foreclosures is not just in the interest of lenders and borrowers. It's in everybody's interest."
Walz noted that a recent study examined ten states including Minnesota and concluded that, in those ten states alone, lost tax revenue in 2008 will total $6.6 billion due to foreclosures. Further, an estimated 524,000 fewer jobs are projected to be created this year because of the foreclosure crisis.
The Neighborhood Stabilization Act of 2008 establishes a $15 billion loan and grant program for the purchase and rehabilitation of owner-vacated, foreclosed homes. The program helps working class families get into the housing market by requiring that homes purchased for resale through the program must be sold to families at or below 140% of area median income.
The American Housing Rescue and Foreclosure Prevention Act of 2008 would make middle-class families eligible to receive a tax benefit that is equivalent to an interest-free loan of up to $7,500 towards the purchase of a first home. Existing homeowners who normally would be able to claim the standard deduction would now be allowed an additional standard deduction for property taxes up to $700 for a married couple filing jointly.