Total Bankruptcy

After months of debate on the best way to address the current housing and foreclosure crisis in the United States, the Senate passed a housing stimulus package by a 84-12 vote earlier today.

Representing a compromise between the call for more government action from Democrats and the fear of a government bailout from Republicans, the housing stimulus package includes these notables:

• providing $4 billion for cities to purchase and rehab foreclosed properties and an additional $13 billion in tax breaks to spur on home sales and home builders;

• changing  language in the FHA's mortgage insurance program to permanently increase its loan limit to $550,000 and slightly increase its down-payment requirement to 3.5 percent;

• providing an additional $50 million for housing couseling, thus bringing the grand total for such  efforts to $150 million;

• giving the Neighborhood Reinvestment Corp. $30 million to provide legal aid for at-risk homeowners; and

• including more safeguards for seniors using FHA reverse mortgages.