Housing Bill Showdown: Who Will Prevail?

Today is a big day on Capitol Hill for both the Senate and the House. The topic at hand is a housing bill. The Senate and the House have two very different bills and the president has threatened to veto the Senate bill. As we speak Sen. Christopher Dodd, the Connectictut Democrat and chair of the Senate Banking Committee and Rep. Barney Frank, the Massachusetts Democrat, are hosting separate hearings. Here is a brief synopsis of the different plans:

The House bill is aimed at supporting first-time home buyers and investors in low-income rental housing. It's an aggessive response to claims that the Fed's "bail out" of Bear Stearns did nothing for people who are about to lose their homes and are facing foreclosure. The plan calls for the government to insure up to $400 billion in troubled mortgages, which could be refinanced at more affordable rates. 

The Senate bill is generally more friendly to business with tax breaks and incentives geared toward home builders and banks with a few exceptions. One of those exceptions is a $7,000 tax credit to buyers of foreclosed homes. One great impediment as far as the president is concerned, is the ability for home builders to get a new tax break by allowing them to claim current losses against taxes paid in earlier years. A proposal that could cost as much as $20 billion.

The president is not happy with the Senate bill and has threatened to veto it. He feels that it will "likely do more harm than good by bailing out lenders and speculators, and passing on costs to other Americans who play by the rules and honor their mortgage debt obligations," according to Dana Perino the  White House press secretary. Today he called for an expension to help 100,000 homeowners. Many of which owe more for their home than it's current appraised value by expanding the the FHA program. The expansion would bring the number of FHA secure homes and lenders up to 500,000 by year end. You may recall that there is a movement to use FHA to fund an additional $300 billion in loans.

On this morning's Money for Breakfast I talked to two leading authorities and I might add two of the best guests that we have ever had. General David Walker, a former U.S. comptroller and Michael Feder, CEO of Radar Logic. I can't leave out my FAVORITE colleague Charles Payne. He also participated and studies stocks and knows this market better than anyone I know. Take a look at this video.

Michael, who is an expert in the real estate market and studies 25 cities across the country talks about the current environment and some signs of hope in the number of homes being purchased.

General Walker, talks about the need for a resolution, a bill, mutually agreed upon that can address today's housing market.

Charles, well you know Charles, he makes a ton of great points.

Trust me! You'll want to watch this one!

Oh and in case you didn't see the statistics at the end of the fourth quarter released by FHA, almost 1 million homes are in foreclosure, roughly 1.5 million homes are 30 days late, 528,000 are 60 days late and 680,000 are 90 days late. No word yet on first quarter results.