Critics: Housing Bill May Encourage Foreclosures
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WASHINGTON — It’s touted as easing the foreclosure crisis and boosting demand for housing, but critics warn that a bill before the Senate might actually encourage foreclosures and drive down house values. At issue is a proposal to award a $7,000 tax credit to people who buy foreclosed homes or homes on which foreclosure has been filed, one piece of a broader measure that awards tax breaks to homebuilders and banks yet offers little for families in foreclosure. It’s chiefly sponsored by Republicans, but it has gotten a chilly reception from the Bush administration, as well as Democrats in the House. The credit is aimed at helping get foreclosed homes off the market, thus stabilizing home prices and keeping blighted houses from dragging down neighborhoods.
