Homebuilders get breaks from Congress

inmytreeinmytree Posts: 4,741
edited April 2008 in A Moving Train
This is bullshit...I thought if people make poor choices, they should reap the consequences...including those who bought a house they couldn't afford...

http://www.businessweek.com/ap/financialnews/D8VQFCDO0.htm

Homebuilders get breaks from Congress

By ALAN ZIBEL


WASHINGTON

Homebuilders and the mortgage industry are emerging as big victors in a bipartisan agreement reached by Senate leaders on legislation designed to limit the housing crisis.

The $15 billion Foreclosure Prevention Act of 2008, expected to be debated Thursday afternoon on the Senate floor, is drawing fire from critics who say it would do little to actually prevent foreclosures. The bill contains a $6 billion emergency tax break that would let companies use losses from 2008 and 2009 to offset profits earned over the previous four years, instead of the usual two-year timeframe.

That's good news for big homebuilders such as KB Home and Pulte Homes Inc., which have been saddled with massive losses over the past year.

Jerry Howard, chief executive of the National Association of Home Builders, said in an interview that the tax break is "very important to the building community." It will keep many small homebuilders out of bankruptcy, he said, and will prevent large builders from having to liquidate assets.

Other big beneficiaries would be Wall Street banks such as Citigroup Inc., Merrill Lynch & Co. and Morgan Stanley. In fact, any company now struggling after years of healthy profits that pumped up their tax bills could benefit.

While Democrats and Republicans called the bill a productive bipartisan compromise, Dean Baker, co-director of the liberal Center for Economic and Policy Research in Washington, questioned whether the trade off was worthwhile for Democrats. "This is first and foremost helping the big villains in the story," he said.

It would be the second time in recent history that the government has amended this accounting tool, known as a "tax loss carryback," to stimulate the economy in the face of a recession.

Earlier this year, the National Association of Home Builders was so dissatisfied by lawmakers' actions -- notably not including the tax provision in the economic stimulus bill-- that it snapped shut its political purse. NAHB said it would stop making contributions to congressional candidates "until further notice."

Since 1990, the trade group has given nearly $20 million to federal candidates, with 35 percent going to Democrats and 65 percent to Republicans, according to the Center for Responsive Politics. A trade group spokesman could not be reached to comment on whether it plans to open its coffers again if Congress passes the housing bill.

The bill also contains $4 billion in grants to local governments to buy and refurbish foreclosed homes, new authority for states to issue bonds to be used to refinance subprime mortgages -- those made to borrowers with poor credit -- and a $7,000 tax credit for people buying properties in foreclosure.

It includes an additional $100 million -- half of what Democrats proposed -- for credit counseling to help homeowners avoid foreclosure. And the agreement permanently raises the limit for loans backed by the Federal Housing Administration to $550,000. That amount had been temporarily raised to nearly $730,000 as part of the economic stimulus bill signed by President Bush in February.

"This is a focused, modest package that will get tremendous bang for the buck in terms of improving the housing crisis," Sen. Charles Schumer, D-N.Y. said in a statement Wednesday. "For sure, there is more to be done. But given the constraints of reaching a bipartisan agreement, this is a worthwhile step."

Schumer and Sen. Patty Murray, D-Wash. will attempt to amend the bill to lift the mortgage counseling allocation back to $200 million.

Homeowners facing bankruptcy, however, won't find relief in the proposal.

The mortgage industry fought fiercely to spike a provision to let bankruptcy judges rewrite the terms of distressed mortgages. It won that battle; the provision was left out.

The Mortgage Bankers Association said it would have hurt more borrowers in the long run by requiring higher interest rates and larger down payments to offset the risk of bankruptcy court intervention.

Steve O'Connor, senior vice president of government affairs at the trade group, praised the deal. "If bankruptcy reform were included, it would destroy the nature of the compromise," O'Connor said.

The absence of bankruptcy intervention was criticized by 15 civil rights, labor and consumer groups -- including the Center for Responsible Lending and the Consumer Federation of America. In a joint statement, they called lawmakers' actions "a win for the financial services industry that brought us this mess."

gSen. Richard Durbin, D-Ill. was expected Thursday to try to get the bankruptcy provision back into the bill.
Post edited by Unknown User on

Comments

  • macgyver06macgyver06 Posts: 2,500
    they come into your town buy up your land (legally somehow) install crappy housing at ridiculous prices and than vanish



    your town is a ghost land.
  • eekamouseeekamouse Posts: 267
    macgyver06 wrote:
    they come into your town buy up your land (legally somehow) install crappy housing at ridiculous prices and than vanish



    your town is a ghost land.

    Amen. Those houses should be burnt the fuck down. *wink* /advocate
    Love is more important to me than faith.
  • Just out of curiousity, how many blue collar workers does the NAHB (or its members) employ?
  • tybirdtybird Posts: 17,388
    Just out of curiousity, how many blue collar workers does the NAHB (or its members) employ?
    How many legal blue collar workers might be a better question....some of the homebuilders in this neck of the woods are as slimy as the politicians.
    All the world will be your enemy, Prince with a thousand enemies, and whenever they catch you, they will kill you. But first they must catch you, digger, listener, runner, prince with the swift warning. Be cunning and full of tricks and your people shall never be destroyed.
  • MLC2006MLC2006 Posts: 861
    I love that second part that is in bold. they were so pissed that they refuse to give campaign contributions to politicians "until further notice". boo-fuckly-who. they shouldn't be ALLOWED to give contributions to candidates to begin with. that's what's wrong with the fucking country. they buy their way into politicians' skin like a parasite that then get the politicians to allow them to bring in slave labor from south of the border to make them as much profit as possible and then expect their paid puppets, the government, to bail them out when they get in a pinch.
  • know1know1 Posts: 6,794
    Tax breaks do not bother me much in general. Of course, I think everyone should get them as opposed to the industries and businesses who aren't doing a good job of managing their business.
    The only people we should try to get even with...
    ...are those who've helped us.

    Right 'round the corner could be bigger than ourselves.
  • macgyver06macgyver06 Posts: 2,500
    inmytree wrote:
    This is bullshit...I thought if people make poor choices, they should reap the consequences...including those who bought a house they couldn't afford...

    http://www.businessweek.com/ap/financialnews/D8VQFCDO0.htm

    Homebuilders get breaks from Congress

    By ALAN ZIBEL


    WASHINGTON

    Homebuilders and the mortgage industry are emerging as big victors in a bipartisan agreement reached by Senate leaders on legislation designed to limit the housing crisis.

    The $15 billion Foreclosure Prevention Act of 2008, expected to be debated Thursday afternoon on the Senate floor, is drawing fire from critics who say it would do little to actually prevent foreclosures. The bill contains a $6 billion emergency tax break that would let companies use losses from 2008 and 2009 to offset profits earned over the previous four years, instead of the usual two-year timeframe.

    That's good news for big homebuilders such as KB Home and Pulte Homes Inc., which have been saddled with massive losses over the past year.

    Jerry Howard, chief executive of the National Association of Home Builders, said in an interview that the tax break is "very important to the building community." It will keep many small homebuilders out of bankruptcy, he said, and will prevent large builders from having to liquidate assets.

    Other big beneficiaries would be Wall Street banks such as Citigroup Inc., Merrill Lynch & Co. and Morgan Stanley. In fact, any company now struggling after years of healthy profits that pumped up their tax bills could benefit.

    While Democrats and Republicans called the bill a productive bipartisan compromise, Dean Baker, co-director of the liberal Center for Economic and Policy Research in Washington, questioned whether the trade off was worthwhile for Democrats. "This is first and foremost helping the big villains in the story," he said.

    It would be the second time in recent history that the government has amended this accounting tool, known as a "tax loss carryback," to stimulate the economy in the face of a recession.

    Earlier this year, the National Association of Home Builders was so dissatisfied by lawmakers' actions -- notably not including the tax provision in the economic stimulus bill-- that it snapped shut its political purse. NAHB said it would stop making contributions to congressional candidates "until further notice."

    Since 1990, the trade group has given nearly $20 million to federal candidates, with 35 percent going to Democrats and 65 percent to Republicans, according to the Center for Responsive Politics. A trade group spokesman could not be reached to comment on whether it plans to open its coffers again if Congress passes the housing bill.

    The bill also contains $4 billion in grants to local governments to buy and refurbish foreclosed homes, new authority for states to issue bonds to be used to refinance subprime mortgages -- those made to borrowers with poor credit -- and a $7,000 tax credit for people buying properties in foreclosure.

    It includes an additional $100 million -- half of what Democrats proposed -- for credit counseling to help homeowners avoid foreclosure. And the agreement permanently raises the limit for loans backed by the Federal Housing Administration to $550,000. That amount had been temporarily raised to nearly $730,000 as part of the economic stimulus bill signed by President Bush in February.

    "This is a focused, modest package that will get tremendous bang for the buck in terms of improving the housing crisis," Sen. Charles Schumer, D-N.Y. said in a statement Wednesday. "For sure, there is more to be done. But given the constraints of reaching a bipartisan agreement, this is a worthwhile step."

    Schumer and Sen. Patty Murray, D-Wash. will attempt to amend the bill to lift the mortgage counseling allocation back to $200 million.

    Homeowners facing bankruptcy, however, won't find relief in the proposal.

    The mortgage industry fought fiercely to spike a provision to let bankruptcy judges rewrite the terms of distressed mortgages. It won that battle; the provision was left out.

    The Mortgage Bankers Association said it would have hurt more borrowers in the long run by requiring higher interest rates and larger down payments to offset the risk of bankruptcy court intervention.

    Steve O'Connor, senior vice president of government affairs at the trade group, praised the deal. "If bankruptcy reform were included, it would destroy the nature of the compromise," O'Connor said.

    The absence of bankruptcy intervention was criticized by 15 civil rights, labor and consumer groups -- including the Center for Responsible Lending and the Consumer Federation of America. In a joint statement, they called lawmakers' actions "a win for the financial services industry that brought us this mess."

    gSen. Richard Durbin, D-Ill. was expected Thursday to try to get the bankruptcy provision back into the bill.


    only the poor class gets ignored sir.
  • Jammin909Jammin909 Posts: 888
    refined, smarter, and better businesses will not emerge if you don't let the slow, inept, and reckless ones die...
    The less you know, the more you believe.
  • know1know1 Posts: 6,794
    Jammin909 wrote:
    refined, smarter, and better businesses will not emerge if you don't let the slow, inept, and reckless ones die...

    Totally agree.


    It's like evolution...but wait we try and keep the slow, weak, dying species alive too...
    The only people we should try to get even with...
    ...are those who've helped us.

    Right 'round the corner could be bigger than ourselves.
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