After the original $15,000 home buyer tax credit was trimmed down to eight grand during negotiations over the economic stimulus package, House Republicans have put it back on the table in a slightly different form.
Rep. Eric Cantor, a Republican from Virginia, and Rep. Mike Pence, a Republican from Indiana, on Wednesday proposed the "Responsible Homeowners Act." Among other things, the measure would offer a $15,000 tax credit to anyone purchasing a primary residence before July 1, 2010 as long as they make a 5 percent down payment.
From the release:
The key to stabilizing home prices is to get people buying homes again. That includes the young couple who is purchasing their first home, the growing family that needs to trade-in their first home for something bigger, and the empty-nesters who are looking to downsize. To spur home purchases across-the-board, House Republicans propose:
• A $15,000 home-buyers credit for all purchases of primary residences provided that the buyer puts 5% down (covers purchases made before July 1, 2010).
To help prevent borrowers from losing their homes, the bill offers tax perks for refinancing and a legal safe harbor for servicers:
To keep responsible homeowners who are at risk of losing their home through no fault of their own, such as those who find themselves temporarily unemployed, House Republicans propose the following:
• Provide a $5,000 refinancing tax credit to help families cover the costs of a mortgage refinancing, buy down points, or reduce their principal balance (covers refinancings through July 1, 2010).
• In exchange for a lender investing in keeping a homeowner in their home by refinancing their mortgage and lowering the owners monthly payments, if the homeowner agrees to share a portion of future home appreciation with the lender, then the lender will not be taxed on that future profit and the borrower will not incur any tax liability as a result of the refinancing (covers refinancings through July 1, 2010).
Many mortgage servicers are fearful that if they modify a mortgage that they could later be sued by one of the many investors who own a portion of the mortgage. As a result, fewer mortgages are modified. To address this problem House Republicans propose:
• To provide a “safe harbor” from lawsuits by investors for mortgage servicers who engage in specified loan modifications consistent with their statutory duties; and would require unsuccessful plaintiffs to pay all attorneys’ fees and any legal costs incurred by the defendant.