By Alan Zibel — AP Real Estate Writer
WASHINGTON (AP) — The Senate voted Wednesday night to give a tax break to homebuyers in hopes of revitalizing the U.S. housing market. The proposal, pushed by battered homebuilders, would allow a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit.
Democrats readily agreed to the proposal, although it may be changed or even deleted as the massive economic stimulus measure makes its way through Congress over the next 10 days or so. The proposal would cost the government an estimated $19 billion. Current law provides for a $7,500 tax break but only for first-time homebuyers.
Meanwhile, with fewer than 500 applications and only two-dozen homeowners helped so far, House lawmakers moved Wednesday to revamp a new program that was intended to help hundreds of thousands of borrowers avoid losing their homes.
The changes approved by the House Financial Services Committee come as Congress and President Barack Obama refine the most dramatic steps yet to boost the ailing U.S. housing market. Treasury Secretary Timothy Geithner is expected to announce a new approach for aiding borrowers and rescuing the flailing financial industry next week.
The Obama administration wants to spend up to $100 billion in financial bailout money to help borrowers stay in their homes.
The government's efforts to stem the foreclosure crisis thus far have relied on voluntary cooperation of the lending industry. The plans have not stopped a dramatic surge in foreclosures that is likely to worsen as workers lose their jobs amid a deepening recession.
"We will have to do more—substantially more—to fix this crisis," Geithner said Wednesday.
Associated Press Writer David Espo contributed to this report.
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