Democrats and Republicans in the U.S. Senate agreed Tuesday to draft a housing rescue bill that could deliver billions of dollars to homeowners facing foreclosure and help steer the economy away from a deep recession.
Democratic leaders want the federal government to pay for more mortgage counselors, rehab projects for empty homes and tax breaks for borrowers stuck in unaffordable loans. Perhaps the most controversial provision of their plan would let bankruptcy judges erase some mortgage debt.
Lawmakers and policy-makers on all sides agree that the country is facing a tough economic crisis led by a wave of failing home loans, but Republicans generally resist a big government bailout.
A "bailout" bill can only partially address the symptoms, it cannot solve the problem. The problem is that there are too many homes for sale, and the price of these homes remains above the fundamentals. Until these conditions are gone, falling prices will continue to wreck havoc with the housing market and the economy.
Sorry Senators- It might be expensive, it might prolong the agony, but it ain’t gonna work.