The U.S. Senate today passed the bipartisan Foreclosure Prevention Act of 2008 that is intended to help address the current housing crisis. The legislation also includes language, based on legislation authored by Senator Susan Collins, which would provide tax incentives to consumers to purchase new, more efficient, clean-burning wood and wood pellet stoves. And it includes provisions backed by Senator Collins to provide for a one-year extension of renewable energy tax incentives.
The final vote was 84-12. Senator Collins voted in favor of the legislation and released the following statement:
“This legislation represents a sensible step in the right direction and would help families and businesses who are struggling as a result of a downturn in the housing market. However, additional steps will be necessary in order to help home owners avoid future foreclosures without bailing out irresponsible lenders who preyed on home buyers or speculators who knowingly took out risky loans in hopes of flipping a property for a quick profit.
“That is why I am pleased that the Administration, this week, agreed to my request to further help families through expansion of Federal Housing Administration programs that would assist with refinancing and guaranteed home loans.”
The Foreclosure Prevention Act of 2008 includes the following provisions:
• Over $10 billion in bond authority for state housing authorities that could be used for subprime loan refinancing, mortgages for first-time home buyers, or multifamily rental housing
• Extension – from two years to four years – of a provision that allows corporations to apply current losses to previous profits and receive applicable tax refunds
• An additional $180 million for foreclosure prevention counseling
• A $7,000 tax credit, spread over two years, for Americans who purchase a foreclosed home
• A standard property tax deduction for taxpayers who do not itemize on their returns
The legislation also includes language, supported by Senator Susan Collins that would provide a $300 tax incentive to consumers to purchase a new, clean-burning wood or wood pellet stove. The language in this bill is based on legislation that Senator Collins introduced in the Senate in February.