Stabenow, Colleagues Pass Housing Bill to Help Communities Devastated by Foreclosure Crisis
Includes Stabenow Amendment to Spur Manufacturing Investment
U.S. Senator Debbie Stabenow (D-MI) today announced Senate passage of the Foreclosure Prevention Act of 2008. The act offers urgent assistance to families and communities devastated by the housing crisis. Included in the legislation is the Stabenow Amendment, co-sponsored with Sen. George Voinovich (R-OH), allowing manufacturers to utilize built-up tax credits to invest in their businesses, stimulate the economy and create new jobs.
"Families and communities across our state are suffering in the grip of a housing crisis that is threatening the economy in Michigan and our Nation," said Stabenow. "This bill is a good first step in helping families facing the loss of their homes and communities devastated by foreclosures - but we can and must do more. That's why I will continue my fight to create good-paying jobs across our state that will provide a true boost to our economy."
The Stabenow Amendment targets companies unable to turn a profit, suffering an economic downturn. Under the new legislation, manufacturers may utilize previously accumulated alternative minimum tax credits and research and development tax credits to create new investments in their businesses including plants, equipment and worker training.
Additionally, the Foreclosure Prevention Act of 2008 includes a provision encouraging the purchase of new homes modeled after legislation originally introduced by Stabenow.
The provision encourages the purchase of homes affected by foreclosure, providing a $7,000 tax credit for buyers of such homes, to be claimed over two years.
Other provisions in the Foreclosure Prevention Act of 2008 include:
FHA Modernization - To ensure that the Federal Housing Administration provides safe, fixed-rate mortgages to those who would most benefit from them, this provision modernizes, streamlines and expands the reach of the FHA program.
Assisting Communities Devastated by Foreclosures - To prevent foreclosures from leading to declining neighborhood values and causing community decline, this provision would provide $4 billion in supplemental Community Development Block Grant Funds to rehabilitate or redevelop homes.
Providing Pre-Foreclosure Counseling for Families in Need - To help families avoid foreclosure, this provision provides $100 million in additional funding for housing counseling. These funds will be distributed by the Neighborhood Reinvestment Corporation to ensure families can quickly get the help they need.
Enhancing Mortgage Disclosure - To ensure that consumers are provided with timely and meaningful disclosures in connection with mortgages, this provision expands the types of home loans subject to early disclosure so borrowers can shop for another loan if not satisfied with the terms. This provision also requires a new disclosure that informs the borrowers of the maximum monthly payments possible under their loan.
Preserving the American Dream for Our Nation's Veterans - To assist returning soldiers that are facing foreclosure, this provision lengthens the time a lender must wait before starting foreclosure from three months to nine months after a soldier returns from service. In addition, the Department of Defense is required to establish a counseling program to ensure veterans and active service members can access assistance if facing financial difficulties.
Standard Property Tax Deduction - To provide tax relief to all American homeowners, this provision makes available a standard deduction ($500 for single filers and $1000 for joint filers) for the 28.3 million non-itemizers who pay property tax. This would change current law that allows only those who itemize deductions on their Federal tax returns to deduct state and local property taxes from their income.
Mortgage Revenue Bonds - To provide for refinancing of subprime loans, mortgages for first-time homebuyers and multifamily rental housing, this provision will include $10 billion in funding from Federally taxed exempt private bonds.
Extension of Net Operating Loss Carry Back - To assist businesses that have been particularly hard hit by the economic slump, the bill extends a law allowing companies to apply excess net operating losses to tax returns from prior profitable years. The provision would extend the net operating loss (NOL) carry back from two years to four years.