House Democrats reshape bill to help more homeowners
House Democrats, opposed to the Senate's focus on helping homebuilders, moved Tuesday to reshape housing legislation to help more homeowners. "We need to provide relief to the buyers and families themselves, not just the banks and builders," said Rep. Charles Rangel, D-N.Y. House Democrats, he said, intend to put "families first."...Also today, House Financial Services Committee Chairman Barney Frank, D-Mass., will hold a hearing on his bill to provide $300 billion for federal guarantees of mortgages for troubled borrowers if lenders make them more affordable.

House Democrats reshape bill to help more homeowners
Wednesday, April 9, 2008

WASHINGTON – House Democrats, opposed to the Senate's focus on helping homebuilders, moved Tuesday to reshape housing legislation to help more homeowners.

"We need to provide relief to the buyers and families themselves, not just the banks and builders," said Rep. Charles Rangel, D-N.Y. House Democrats, he said, intend to put "families first."

Mr. Rangel's Ways and Means Committee will vote Thursday on his legislation to provide tax breaks to homeowners, first-time homebuyers and developers of low-income housing. In contrast to the Senate, Mr. Rangel will not offer $25 billion in tax breaks to homebuilders and bankers.

Also today, House Financial Services Committee Chairman Barney Frank, D-Mass., will hold a hearing on his bill to provide $300 billion for federal guarantees of mortgages for troubled borrowers if lenders make them more affordable.

Mr. Rangel said he designed his bill to complement Mr. Frank's. The House's Democratic leadership could combine the two into a single package for a House floor vote.

Meanwhile, the Senate is swiftly moving toward a vote on its version of housing legislation. The Senate emphasizes tax breaks for homebuilders, lenders and other money-losing businesses.

On Tuesday, the Senate voted 92-6 to limit debate on that package, setting the stage for a vote today.

While all six "no" votes came from Republicans, the vast majority of their colleagues backed the bill.

So it came as something of a surprise when the White House offered a negative assessment of the Senate bill.

At a news briefing, White House press secretary Dana Perino said elements of the Senate legislation would "likely do more harm than good by bailing out lenders and speculators and passing on costs to other Americans who play by the rules and honor their mortgage debt obligations."

The Bush administration also appears set to support an expansion of its assistance for struggling homeowners.

In a draft of testimony for a congressional hearing, Brian Montgomery, the commissioner of the Federal Housing Administration, is expected to say that a federal program that offers government insurance for mortgages created last summer "can and should be extended in a responsible way."

Under the expanded program, lenders could get FHA insurance for problem loans in exchange for "voluntarily writing down the outstanding mortgage principal," according to the testimony.

That would entail the government being responsible for an increasing number of risky loans.

The centerpiece of the Senate package is a "carryback" provision that lets businesses increase to four years, from two, the time they could apply losses suffered in 2008 and 2009 to past tax bills. That would help builders offset profit made during boom times with their recent losses.

The Senate also included a provision creating a tax credit of up to $7,000 over two years for people who buy foreclosed homes.

The House measure does not include the carryback breaks, and it scratches the tax credit plan.

Instead, it would create a temporary tax credit of as much as $8,000 for first-time buyers and increase the availability of tax credits for investors in low-income housing.

Mr. Rangel's bill is similar to the Senate's in that it would create a standard deduction for property taxes, which would help more than 28 million homeowners who do not itemize on their federal tax returns.

And like the Senate measure, it would expand the authority of state and local housing finance agencies to use tax-exempt bonds to help refinance mortgages.

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Cox News Service and The Wall Street Journal contributed to this report.