Senate leaders are working on a package of legislation to help the homeowners on the edge of foreclosure. The fact is that around 4.2 million mortgages were either past due or in foreclosure while 2007 was coming to its end, and 3 million more may deault in the next few months.
The rescue proposals include:
- $10 billiion in tax-exempt bonds to refinance subprime loans
- $4 billion to local governments to buy foreclosed properties
- $15,000 tax credit for purchases of foreclosed homes or newly built homes that have been sitting vacant.
The main goal of this effort is to transform risky subprime mortgage that borrowers can't afford into traditional 30-year loans.
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