A controversial provision that would have allowed bankruptcy judges to modify mortgage agreements for primary homes was not part of the housing relief compromise package that passed the Senate yesterday.
The language was dropped in the hours leading up the bill’s passage. White House advisors had urged a veto of the bill if it included the measure, and the banking industry had lobbied heavily for the language to be dropped.
The final version of the bill would send $4 billion in grants to local governments to buy and refurbish foreclosed homes, allow states to issue bonds to be used to refinance subprime mortgages, and provide for a a temporary $7,000 tax credit for people buying new homes or properties in foreclosure.
After a day of heavy horse trading, Senate Banking Committee Chairman Chris Dodd said the measure was not a complete solution to the housing crisis.
“There’s a lot more that needs to be done,” Dodd said. “But it’s a step in the right direction.”