Senate votes down proposal of 4.5 percent mortgage rates

From Sean Cutright's blog on real estate news and technology:

It appears the $15,000 homebuyer tax credit wasn't the only housing proposal that Congress recently shot down. They also nixed Amendment 353, a Senate plan that would have encouraged banks to lower mortgage rates to 4-4.5 percent.

A Los Angeles Times story on the amendment's vote states:
"A plan by Republicans in the Senate aimed at pushing mortgage rates lower has gone down to defeat at the hands of Democrats.

The plan by Nevada Republican John Ensign would have encouraged banks to issue mortgages with interest rates of 4 to 4.5 percent. The government-controlled mortgage giants Fannie Mae and Freddie Mac would have bought the mortgages on the secondary market. Jumbo loans would have been ineligible.

Democrats killed the idea Thursday night by a 62-35 vote.

The plan also contained an assortment of expensive tax cuts such as cutting the bottom 10 percent income tax rate in half for two years.

New York Democrat Charles Schumer said the plan was too expensive and would provide a windfall to banks charging fees to refinance mortgages."

Will Congress re-work the amendment? It's tough to say now, as it seems to have been over-looked by the homebuyer tax credit proposed as part of the economic stimulus bill. The homebuyer tax credit was initially proposed at $15,000, then was said to have been "wiped out" of the bill, only to resurface at $8,000. Details are still being worked out on the tax credit, including an update that the credit will only be good for homes purchased through the end of August.

I will keep you posted with any new updates on these topics and other real estate news.

-Sean Cutright