WASHINGTON — Two House-passed measures aimed at defusing the nation's real-estate crisis would help New Jersey homeowners and the state's housing market stabilize, supporters say.
But they have powerful opponents including President Bush, who has threatened to veto one of the measures. Both pieces of legislation, which passed Thursday, await consideration in the Senate.
Both are intended to help homeowners facing foreclosure and communities dotted with abandoned foreclosed homes.
The package contains a provision sponsored by Rep. Rush Holt, D-N.J., creating a new property tax deduction of $350 to $700 for those who don't itemize on their federal tax returns — a potential boost for New Jerseyans, who pay the highest property taxes in the country.
Jarrod Grasso, executive vice president of the New Jersey Association of Realtors, said in a telephone interview from his Edison office Friday that the Northeast has been spared the brunt of the real-estate woes other states like Florida, California and Nevada are facing.
But New Jerseyans looking to buy homes are finding that the days of no-money-down loans and easy credit are long gone.
Grasso said the House-passed measures — which he lobbied the New Jersey congressional delegation to support during a visit to Capitol Hill last month — would help homeowners facing foreclosure and simultaneously reduce the inventory of unsold homes.
He singled out one House-approved bill that would give first-time homebuyers a $7,500 tax credit to deplete existing inventories.
"This is going to help people get into the market. If there's one message I'd like to pass on to our U.S. senators, it's this: We need . . . this legislation," said Grasso, whose industry would profit if there's a sudden surge in buyers.
Both measures passed the House on mostly party-line votes with Democrats arguing that the mortgage crisis warranted federal assistance. Republican opponents called the legislation a bailout for lenders who made risky loans and said helping some homeowners was unfair to the majority who pay their mortgages on time.
One measure, which passed 239-188, authorizes $15 billion in loans and grants to states to buy up and redevelop foreclosed homes that have been abandoned. Eleven Republicans voted yes and one Democrat voted against it. New Jersey's seven Democrats votes yes and six Republicans voted no.
The other would provide $300 billion in loan guarantees through the Federal Housing Administration so families at risk of foreclosure could refinance their mortgages. It passed 266-154, with 39 Republicans voting for the bill, including Rep. Chris Smith, R-Hamilton. New Jersey Democrats voted yes and the other five Republicans voted no.
Grasso said increasing FHA's loan limits would help New Jersey homeowners to get fixed-rate, low-interest loans with a down payment of 3 percent. These loans are aimed at homeowners who plan to buy houses to live in, not speculators.
This is the bill Bush threatened to veto.
"We are committed to a good housing bill that will help folks stay in their house, as opposed to a housing bill that will reward speculators and lenders," Bush said in announcing his veto and urging Congress to support a Republican alternative co-sponsored by Rep. Rodney Frelinghuysen, R-N.J., among others.
Rep. Rob Andrews, D-N.J., who called Bush's veto threat "dumbfounding," said in an interview the House-passed measures are a good first step. What Congress should do next is spur private companies' confidence in the real estate market.
He said that could be achieved by lifting limits on how much money government-sponsored Fannie Mae and rival Freddie Mac provide to mortgage companies.
New Jerseyans "are seeking some help," said Andrews, who sponsored a different housing bill Bush recently signed into law. "There is a town in Burlington County where I am told nearly a fifth of the properties are in foreclosure. People are seeking some commonsense relief."
