Both of Minnesota's U.S. senators are calling the housing bill bipartisan legislation that reflects an urgent need for Congress to do something about home foreclosures.
Earlier this week, DFL Sen. Amy Klobuchar spoke at a foreclosure forum in Hopkins. Klobuchar said she chose a suburban location for the forum to underscore that the foreclosure crisis has spread from its inner-city roots.
"We've seen home values in Minnesota down about 10 percent," Klobuchar said. "We've seen a ripple effect that's more like a tsunami wave across this country, in terms of the tightening of the credit markets for cars and for other things."
"We just had the Federal Reserve head Ben Bernanke testify before our joint economic committee, and he really said that he saw the housing crisis as the root of a lot of the problems we're seeing in the economy as a whole," Klobuchar continued.
The Senate bill is likely to include several provisions aimed at shoring up the weak housing market. Among them are tax credits for buyers of foreclosed homes, along with billions of dollars to refinance problem mortgages and for cities to buy foreclosed properties.
But the bill also provides billions of dollars in tax breaks for businesses. Critics, including Democratic House Speaker Nancy Pelosi, say those tax breaks come at the expense of directly helping homeowners who are in trouble.
“There are 8,000 foreclosures a day, and a day that we don't get something done, more people are being forced out of their homes.”U.S. Sen. Norm Coleman, R-Minn.
Klobuchar said the bill is a compromise which she hopes will help Minnesotans in danger of losing their homes.
"I think there's a clear realization that we need to get something done here," said Klobuchar. "I think the focus should be on Main Street and not on Wall Street, and we can see how far we can move the bill in that direction."
Republican Norm Coleman called the Senate bill a comprehensive, bipartisan approach to addressing the housing crisis.
"I'm thrilled that we've gotten to this point," said Coleman.
Coleman has been touting a provision that gives returning veterans significantly more time to restructure delinquent loans. He also has been pushing for a measure that would allow homeowners facing foreclosure to restructure loans, using up to $25,000 of their retirement savings without penalty.
"The whole purpose of this bill is to try to keep people in their homes," Coleman said. "There are 8,000 foreclosures a day, and a day that we don't get something done, more people are being forced out of their homes."
Both Coleman and Klobuchar highlight the Senate bill's increased spending to expand counseling programs to assist homeowners. But even at $100 million, some say the money for counseling isn't enough.
The executive director of the Minnesota Home Ownership Center, Julie Gugin, says the best way to stem the tide of home foreclosure is through counseling. Gugin said the $100 million is half what she and other advocates had been expecting.
"We're going to continue to fight for additional dollars for counseling and other activities that will directly help consumers," Gugin said. "And while we had initially understood that the new legislation had proposed $200 million for counseling, I now understand that what's being discussed is $100 million. Obviously we would have preferred the $200 million."
The House of Representatives is also working on a housing bill. Unlike the Senate, the House measure is not expected to include the billions of dollars in tax breaks for businesses.
The House and Senate housing bills are considered the first in a series of congressional efforts to address foreclosures.
Coming next from Washington will likely be billions of dollars the Federal Housing Administration could use to refinance problem home mortgages.