By Jin Zheng
The housing stimulus bill has been approved by the House of Representatives and is now being decided on by the Senate. Among the things to be discussed by senators from both parties will be how to encourage home sales and help home owners who are on the verge of losing their homes. As a result, there will be a lot of things that needs to be discussed in order for the bill to be passed.
One of the idea is that Republicans want to offer a 30 year fix rate mortgage at 4% for a limited period of time and only individuals with good credit is able to get this loan; this will be government backed as the government will be making up the difference in the rates. This will fix banks by fixing consumers but it will be very expensive, especially if the mortgage rates increases.
Second idea is expanding the home buyer credit. Currently, there is a temporary $7,500 first time home buyers credit proposed in the bill but Senator Kent Conrad, who is Senate Budget Committee Chairman, wants to expand it to make it apply to all housing purchases. In addition, it is desired that the credit is increased to $15,000.
Another idea would be to allow foreclosures to be postponed for 90 days. This is to allow individuals who are about to lose their homes to keep their homes for an additional three months. As a result, the home owners can find a way to keep their homes by working with their mortgage providers. If this bill does get passed, home owners can see lower mortgage rates and provisions to help them keep their homes. Home buyers, on the other hand, can receive tax credits.