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Republicans Could Block New Foreclosure and Bankruptcy Relief Bill in Senate
By jason | March 3, 2008
As a new foreclosure bill aimed at forgiving some mortgage debts in order to alleviate the rising surge in foreclosures nation wife hits the Senate this week, many believe that the republican representatives will attempt to block it. This comes on the heels of recent statements coming out of the White House hinting at the fact that President George Bush would veto any such bill that came before him, were changes to the policy not made. The republican senators are expected allow limited debate on the bill before subjecting it to a floor vote, at which point they would attempt to vote it down.
Senate Majority Leader Harry Reid recently announced that if Bush were to veto the new bill, he would seek to overturn that veto in the Senate. Citing the drastic need for some kind of change in the housing situation, Reid announced that he believes the bill will be important for easing debt among defaulted homeowners.
During the debate of the bill in the Senate, which is expected to take place either today or tomorrow, Reid will allow amendments to be added to the bill, but stressed that it is important to take into account the housing crisis only, which is a very pressing issue, instead of adding on other controversial items such as an estate tax reform, which has been a hotbed issue among many republican senators.
The biggest problem that the Republicans have with the proposed bill however is a provision that would allow certain bankruptcy judges to move to strike portions of debt for homeowners in default. The bill would also establish a $4 billion fund that would be available to lenders for buying up foreclosed and abandoned properties. Foreclosed homes and abandoned homes are seen as major detractors of property value, and the more of them on the market, the less likely it is that the market will be able to rebound anytime soon. The logic is that by buying up these homes, lenders will be able to alleviate their losses and help the market stabilize.
However, Bush and the republicans see this as unfairly bailing out the lenders from their own debt using federal money.
This issue will surely be a hot one in the housing market for some time. It is the first major bill to come forward to address the foreclosure situation, but it has sparked debate on several others, including one currently working its way through the House of Representatives.
Topics: Bankruptcy |
May 27th, 2008 at 2:40 pm
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