- NEW: Senate leaders agreed to move forward on stalled housing legislation
- Proposed bill allows bankruptcy judges to reset mortgages on primary residences
- Bill would give $4 billion for communities to buy, refurbish foreclosed properties
By Ted Barrett
CNN WASHINGTON (CNN) -- Senate leaders have agreed to move forward on stalled legislation aimed at easing the impact of the falling housing market, the chamber's top Republican and Democrat announced Tuesday. "The time has come for us to legislate, not continue our bickering," Senate Majority Leader Harry Reid, D-Nevada, told reporters.
Despite the increasing pressure to find solutions to the deepening mortgage crisis, Senate leaders had been locked in a procedural stalemate over how to take up the Democratic-authored bill. "Every day Congress and the president do nothing is another day closer to another American family losing their home," Reid had warned on the Senate floor. The bill would, for the first time, allow bankruptcy judges to reset mortgages on primary residences. It would also provide $4 billion for local communities to buy and refurbish foreclosed properties; provide $200 million for counseling to help homeowners avoid foreclosure; give tax breaks for the homebuilding industry; and improve loan disclosure and transparency. Republicans threatened to block the bill, as they did before the recess, unless Democrats gave in to their demands to allow votes on certain GOP amendments. Most Republicans back a proposal by Republican Sens. Kit Bond of Missouri and Johnny Isakson of Georgia. Its key feature is a $15,000 tax credit for people who buy and occupy a home that is in or near foreclosure. The bill shares other aspects of the Democratic proposal -- but not the controversial bankruptcy provision, which Republicans vehemently oppose. They argue it will force banks to increase mortgage rates across the board. Democrats "propose an ill-conceived plan that will substantially increase monthly mortgage payments on everyone who buys a new home or refinances," Republican Leader Mitch McConnell said. "There is no way this proposal is going to fly. If Democrats want to help homeowners, they need to work with Republicans on proposals that will draw substantial bipartisan support." But Democrats complained Monday that Republicans also want votes on amendments related to nonhousing issues, such as extending President Bush's 2001 and 2003 tax cuts. A GOP leadership aide doubted such amendments would be offered by his party. A Democratic leadership aide predicted political pressure during the break might pry loose enough Republican votes to get over the 60-vote hurdle needed Tuesday to begin the debate. The aide pointed to Republican Sen. Mel Martinez of Florida, who told CNN he "would hope" Republicans and Democrats would "come together with a package of solutions that are realistic about those things which can be done." Martinez, a former secretary of housing and urban development, is frustrated by the lack of action and wants to find a way to move the bill, an aide said. Even Republican Leader McConnell said Congress must act to prevent the crisis from worsening: "I think it's safe to say there is interest on both sides in moving forward," he told Reid on the floor. All AboutHome Financing • U.S. Department of Housing and Urban Development • U.S. Senate |
