The U.S. Senate’s recent “Foreclosure Prevention Act” will benefit developers and lenders while leaving homeowners at risk of foreclosure out in the cold.
Of the $28.8 billion in expected costs through 2010, $25.5 billion would go to businesses in the form of tax rebates. Provisions include a $7,000 tax break for buyers of foreclosed homes—essentially a subsidy to lenders looking to sell property. (Washington Post, April 4)
Under pressure from lenders, the Senate eliminated a provision that could have averted more than 500,000 foreclosures by allowing judges to lower interest rates on mortgages, extend loans or partially forgive debts
Developers would be allowed to apply their tax losses from 2007 to 2009 to their profits from the previous four years, a two-year extension under previous tax law, allowing them to recoup some or all taxes paid during the housing boom.
