Cardin asserts himself in bi-partisan Senate housing legislation

Today in Washington, Sen. Ben Cardin is at the forefront of negotiations over bi-partisan legislation being considered by the Senate that would prevent further home foreclosures, introducing his own first-time buyers tax credit.

The legislation, estimated to cost from $15 to $20 billion is based on the Foreclosure Prevention Act which Cardin co-sponsored earlier this year. Preliminary provisions allowed for property tax deductions for 28.3 million filers, tax credits for new buyers, $10 billion in tax-exempt bonds toward refinancing, $4 billion in grants for to local governments to by foreclosed properties and $100 million to expand mortgage counseling.

The surprisingly quick action on the foreclosure legislation was spurred by the Senate’s fear of looking aloof during the housing crisis – especially after the Federal Reserve went to the rescue of the collapsing financial giant Bear Stearns.

Said Cardin in his floor statement yesterday: “The Fed acted quickly to protect Wall Street. We have to act quickly to protect Main Street.”

Earlier this morning, Cardin also announced a First-Time Home Buyer Tax Credit to provide a temporary stimulus for new buyers in the housing market. The credit comes in the form of a partial refund, offsetting down payment or closing costs for prospective homebuyers. The credit would apply to primary homes only.

“Today, it’s estimated that 40% of the market is first-time home buyers,” the Senator said yesterday. “In Baltimore, two-thirds are first-time home buyers. Let's re-energize the market and help families buy a home.”

The bill faces hurdles before it is sent to the President’s desk, namely over how to pay for it and the possible inclusion of a controversial amendment changing the bankruptcy code to allow judges to modify the terms of mortgages on principal residences. A similar provision was responsible for stalling the previous bill.

Cardin has been vocal in his support for changing the bankruptcy rule.

“Senator Cardin thinks it makes no sense at all that a judge can adjust the mortgages for your vacation home and your payments on your boat but cannot, today, make adjustments to your residential mortgage,” said spokesperson Sue Walitsky.

On breaking down the costs, Walitsky said Cardin stands with a majority of Senators who believe the Congress has a responsibility to act swiftly, and doesn’t see it as preventing to passage.

All this comes as Gov. Martin O’Malley will sign emergency state legislation aimed at preventing foreclosures in Annapolis later this afternoon.