The Senate floor debate is set to begin today. Here are three ideas likely to show up in amendments:
Create a 4% mortgage: 30-year fixed rate mortgage at 4% for a limited period of time. The loans would only be available to credit-worthy home buyers and homeowners seeking to refinance.
If today’s prevailing rate were 5.2 or 5.3 percent … the government would make up the difference.
The cost of such a provision hasn’t been determined but as mortgage rates rise, which they have in recent weeks, such a proposal will be very expensive.
Expand home buyer credit: Senate Budget Committee Chairman Kent Conrad, D-N.D., said last week he would propose an expansion of a temporary $7,500 first-time home buyer credit so that it applies to all purchases of primary residences.
Some Republican senators have called for an increase in the credit to $15,000. (Why stop there)
The Senate recovery package as it stands now removes the requirement under current law that the credit be repaid by buyers over time, assuming they don’t sell their home for three years after claiming the credit.
The credit phases out for individuals making more than $75,000 ($150,000 for joint filers).
Hold off on foreclosures: Senate Banking Committee Chairman Christopher Dodd, D-Conn., told reporters last week that he would like a provision in the stimulus package that would impose a 90-day moratorium on foreclosures.
Postponing a foreclosure for three months might allow some troubled borrowers to keep their homes by buying them time to work out a new loan agreement with their mortgage servicer. (I don’t think so)
What are your thoughts?