And the Laborers went even further, issuing a special report analyzing how the Senate-passed subsidies would help those lenders who caused the housing and credit crisis, rather than workers who suffer from it.
The critiques came as the Democratic-run 110th Congress rushed through a $28-billion (gross) package of measures, worked out by Senate Banking and Housing Committee Chairman Christopher J. Dodd, D-Conn., and its top Republican, Richard Shelby, R-Ala. Most of it was at least $6 billion in tax cuts for businesses and billions more in subsidies to new buyers of foreclosed homes.
But the package also authorized — but did not actually dole out — $4 billion to cities and towns to buy, restore and resell foreclosed properties, and $100 million for non-profit groups to counsel homeowners and aid them in avoiding default.
The key Democratic idea, letting bankruptcy judges intervene to rewrite mortgage terms, lowering interest rates and monthly payments so that people could keep their homes, was dumped in the face of twin GOP threats: A Senate filibuster and a veto by President Bush. Senators defeated it 36-58.
That provision would have helped 600,000 people save their homes, AFL-CIO Legislative Director Bill Samuel said. Without the mortgage revision section, "The bill would do little to strengthen the economy for middle class working families," he added.
The lack of mortgage relief for homeowners also displeased AFL-CIO Secretary-Treasurer Richard Trumka.
"Policymakers should take immediate steps to resolve the mortgage foreclosure crisis and hold those responsible accountable," Trumka said, as part of a wider critique of a Bush plan to change regulation of capital markets, including those markets that caused the financial crunch and that put homeowners at risk.
Trumka called for "an immediate moratorium on foreclosures on all sub-prime and adjustable rate mortgages." And "industry and the government must create a structured program providing for the replacement of teaser rate loans with conventional mortgages," he added.
Delving into the text of the rescue bill, as the Laborers did, showed the situation was even worse. The congressional Joint Economic Committee later issued its own report, agreeing with the Laborers\' findings. LIUNA released its report March 31.
"The Foreclosure Prevention Act is being held up as a way to help struggling homeowners, and LIUNA supports many provisions of the bill," the union said in introducing its study.
"But under the bill\'s little-publicized \'carry-back\' provision, builders would get billions in tax breaks. The carry-back provision would allow homebuilders to apply losses from 2006 and 2007 as far back as five years against taxes paid on profits even though much of the builders\' profit came from their own sub-prime lending and speculative over-heating of the market," the union added.
Many of the most-risky mortgages were issued by lenders controlled by the homebuilders themselves, the union discovered. It noted, for example, that sub-prime mortgage loans by the nation\'s #5 builder, Los Angeles-based KB Home, rose 405% from 2005 to 2006.
The Laborers reported the 15 largest corporate homebuilders would receive a third of the benefits--$10.8 billion total over three years--of the carry-back provision. "The largest homebuilders made $16 billion in profits on $100 billion in revenues in 2006, much of it from a dramatic increase in sub-prime and high-risk lending, and from feeding speculators," the union pointed out. It said the builders steered borrowers to high-risk sub-prime loans.
"The carry-back proposal will potentially further decimate the housing market and
home values across America. Corporate homebuilders are seeking a handout for a crisis they recklessly helped create. And the remedy corporate homebuilders propose won\'t help those who need it most--homeowners and residential construction workers," the report states. It also could let the homebuilders "dump inventory at any price," further depressing prices while carrying back the losses.
The report notes that the Laborers alone --not counting other construction unions --have lost 200,000 jobs in the housing meltdown and that 3 million homeowners are at risk of eviction after losing their mortgages.
Mark Gruenberg writes for Press Associates, Inc., news service. Used by permission.
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And the Laborers went even further, issuing a special report analyzing how the Senate-passed subsidies would help those lenders who caused the housing and credit crisis, rather than workers who suffer from it.
The critiques came as the Democratic-run 110th Congress rushed through a $28-billion (gross) package of measures, worked out by Senate Banking and Housing Committee Chairman Christopher J. Dodd, D-Conn., and its top Republican, Richard Shelby, R-Ala. Most of it was at least $6 billion in tax cuts for businesses and billions more in subsidies to new buyers of foreclosed homes.
But the package also authorized — but did not actually dole out — $4 billion to cities and towns to buy, restore and resell foreclosed properties, and $100 million for non-profit groups to counsel homeowners and aid them in avoiding default.
The key Democratic idea, letting bankruptcy judges intervene to rewrite mortgage terms, lowering interest rates and monthly payments so that people could keep their homes, was dumped in the face of twin GOP threats: A Senate filibuster and a veto by President Bush. Senators defeated it 36-58.
That provision would have helped 600,000 people save their homes, AFL-CIO Legislative Director Bill Samuel said. Without the mortgage revision section, "The bill would do little to strengthen the economy for middle class working families," he added.
The lack of mortgage relief for homeowners also displeased AFL-CIO Secretary-Treasurer Richard Trumka.
"Policymakers should take immediate steps to resolve the mortgage foreclosure crisis and hold those responsible accountable," Trumka said, as part of a wider critique of a Bush plan to change regulation of capital markets, including those markets that caused the financial crunch and that put homeowners at risk.
Trumka called for "an immediate moratorium on foreclosures on all sub-prime and adjustable rate mortgages." And "industry and the government must create a structured program providing for the replacement of teaser rate loans with conventional mortgages," he added.
Delving into the text of the rescue bill, as the Laborers did, showed the situation was even worse. The congressional Joint Economic Committee later issued its own report, agreeing with the Laborers\’ findings. LIUNA released its report March 31.
"The Foreclosure Prevention Act is being held up as a way to help struggling homeowners, and LIUNA supports many provisions of the bill," the union said in introducing its study.
"But under the bill\’s little-publicized \’carry-back\’ provision, builders would get billions in tax breaks. The carry-back provision would allow homebuilders to apply losses from 2006 and 2007 as far back as five years against taxes paid on profits even though much of the builders\’ profit came from their own sub-prime lending and speculative over-heating of the market," the union added.
Many of the most-risky mortgages were issued by lenders controlled by the homebuilders themselves, the union discovered. It noted, for example, that sub-prime mortgage loans by the nation\’s #5 builder, Los Angeles-based KB Home, rose 405% from 2005 to 2006.
The Laborers reported the 15 largest corporate homebuilders would receive a third of the benefits–$10.8 billion total over three years–of the carry-back provision. "The largest homebuilders made $16 billion in profits on $100 billion in revenues in 2006, much of it from a dramatic increase in sub-prime and high-risk lending, and from feeding speculators," the union pointed out. It said the builders steered borrowers to high-risk sub-prime loans.
"The carry-back proposal will potentially further decimate the housing market and
home values across America. Corporate homebuilders are seeking a handout for a crisis they recklessly helped create. And the remedy corporate homebuilders propose won\’t help those who need it most–homeowners and residential construction workers," the report states. It also could let the homebuilders "dump inventory at any price," further depressing prices while carrying back the losses.
The report notes that the Laborers alone –not counting other construction unions –have lost 200,000 jobs in the housing meltdown and that 3 million homeowners are at risk of eviction after losing their mortgages.
Mark Gruenberg writes for Press Associates, Inc., news service. Used by permission.