Second Stimulus Package in the Works

Sources: CNN-Money, MSNBC

To alleviate the current US mortgage and housing crisis, a bipartisan measure is under debate in the US Congress. The measure, which receives high marks from mortgage bankers but some measured criticism from housing advocates, may be set for a vote sometime next week. The $15 billion measure contains a wide variety of measures designed to help struggling homeowners cope with the increased cost of their home mortgages. The bill, in summary, allows homeowners to refinance high-interest loans, as well as providing tax breaks for homebuilders and other tax benefits for homeowners and homebuyers.

Some specific provisions are designed to alleviate homeowner debts. The Federal Housing Association has agreed to insure $400 billion in loans, if lenders make them more reasonable to borrowers. Second, bankruptcy judges can now adjust mortgage debts. Third, states can now offer tax-free bonds that will subsidize refinancing. Fourth, buyers who purchase distressed homes will receive a tax credit. Fifth, many owners will get a tax deduction for the property taxes they have already paid. Others measure include grants to local and city officials to purchase foreclosed homes, additional money for loan counselors, and more transparency in the borrowing process.

Mortgage bankers praise the package. According to the chairman of the Mortgage Bankers Association, “A more modern and effective FHA, mortgage revenue bonds for state housing finance agencies, additional money for counseling - these are all things that will be of great help to struggling homeowners." Conversely, housing advocates claim that the package does not go far enough, and adds in generous perks to homebuilders.

Question: Is the $15 billion price tag on this measure "worth it?" The US is already saddled with staggering debt, a troubled economy, and two expensive wars--will the $15 billion price tag simply create more long-term problems?