Housing Bill Passes U.S. Senate: Sen. Menendez Says It Is First Step Toward Helping Homeowners

Press Release

Today, the U.S. Senate passed the Foreclosure Prevention Act to provide relief to families struggling to keep their homes and incentives to potential homebuyers. Senator Robert Menendez (D-NJ), a member of the Senate Banking Committee, today praised the bill while making it clear that it is only a first step toward addressing the housing crisis, and that the bill would have been stronger had it included a Democratic provision to allow families to modify their mortgages in the bankruptcy process. The bill also includes a provision mirroring a 2006 Menendez bill that creates a new property tax deduction for tax filers who do not itemize on their federal tax returns, which could bring relief to up to 450,000 New Jerseyans.

"These measures will bring some needed relief to families and communities struggling with the effects of foreclosure," said Senator Menendez. "The housing crisis not only devastates families who lose their dreams, but it is also the root of our nation's overall economic tailspin. There is no magic wand we can wave to make all the problems go away at once, but in Congress we are committed to spurring an economic recovery wherever we have an opening to do so.

"I am also pleased that this bill includes a provision I have championed to give relief to up to 450,000 New Jerseyans in the form of a property tax credit. I will continue to work to make sure this provision becomes law and provides the broadest relief possible.

"The bill we passed today is a step in that direction, although it should have also included stronger homeowner assistance and a measure to allow homeowners to modify their mortgages in the bankruptcy process, which the Republicans opposed. Foreclosures are bad for homeowners, bad for banks, bad for communities and bad for everyone living in this economy, and sensible proposals to avoid them should be encouraged, not blocked."

Provisions in the bill include:

• More affordable mortgages made available - allows more Americans to take advantage of affordable, fixed-rate Federal Housing Administration loans
• Assistance to families struggling with bad loans - expands and increases funding for mortgage counseling to help families avoid foreclosure
• Assistance for communities devastated by foreclosures - provides assistance to hard-hit communities to purchase, rehabilitate and resell foreclosed homes to help stop the ripple effect that foreclosures have on entire communities
• New property tax deduction for non-itemizers - creates a new tax deduction for property taxes ($500 for single filers, $1,000 for joint filers) for non-itemizers, which could provide relief for up to 28 million taxpayers and 450,000 New Jerseyans
• Tax-exempt mortgage revenue bonds - provides an additional $10 billion of federal tax-exempt bond authority to help states and municipalities shore up local housing markets, which could help first-time homebuyers, multi-family housing renters, and subprime mortgage holders access financing
• Tax credit for purchase of foreclosed homes - creates a new $7,000 tax credit for those who purchase foreclosed homes to help prospective homebuyers buy a new home and help restore property values in neighborhoods suffering from declining values due to foreclosure

Source