Housing Rescue Plan Clears First Hurdle

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CBNNews.com  - WASHINGTON - Congress is wrapping up legislation that will lend a helping hand to struggling homeowners. The bill comes as home prices plummet and foreclosures continue to rise.

The Troubled Housing Market

A Harvard study out this week says the housing situation could be "the worst in a generation."

Home prices across the country fell more than 16.35 percent over this time last year - the worst decline in two decades. And some economists think the worst may not be over yet.

"A lot of the factors that pushed housing prices to drop and have kept them falling are very much still in place," said David Blitzer of the Case-Shiller Index.

With unsold homes at record highs - by some estimates 8,000 new foreclosures a day - Congress is working feverishly to pass new a housing bill.

The legislation would "allow us to begin to put a tourniquet on the hemorrhaging on foreclosures in this country," Sen. Chris Dodd CT said.

"We need to demonstrate to people in this country that have lost an awful lot of faith in almost everything, but certainly in , that we can get something done, that we can put aside differences and make a difference in their lives," Dodd said.

As it stands now, the hallmark is a refinancing program worth hundreds of billions of dollars that would help homeowners stave off foreclosure.

The bill would also overhaul mortgage financing and require lenders to follower stricter disclosure rules.

And it would give first time home-buyers an 8,000 tax credit for buying empty foreclosed homes.

Both Parties on Board

The bill has bipartisan support and already passed in the House.

But skeptics charge that it unfairly rewards irresponsible borrowers and lenders, and foots the bill on the backs of taxpayers.

"They expect the federal government to turn their backs on responsible lenders and borrowers and renters waiting - waiting - to become first-time homeowners, and support those groups that have pushed our housing market into decline with bad loans and bad investments," said Sen. Mike Enzi, R-Wyo.

"This bill is a federal government bailout," he said.

Still, with Americans losing so much money in home values, lawmakers on both sides of the aisle are eager to act.

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