The Senate is eagerly awaiting the new upcoming economic stimulus package, they want to boost sales and help at risk home owners. Mitch McConnell, R-KY Senate minority leader, told  CNN that, "We need to go right at the housing problem. That's what started all of this,". Right now there are 3 main focus points that the Senate will be aiming for.

It is expected that the Senate Republicans will create a provision to encourage lenders to offer 30-year fixed rate mortgages at 4% for a certain amount of time. These will only be available for buyers with good credit and homeowners looking to refinance. McConnell said that the government would guarantee this type of loan for many years. Lamar Alexander, Senate Republican Conference Chairman from TN, said that a subsidy could also be involved, "If today's prevailing rate were 5.2 or 5.3 percent ... the government would make up the difference." Of course while this could help the market, a move like this could also become costly. Jaret Seibert, a financial services analyst with Standord Group, wrote that providing goverment-backed mortgages such as these, "could be very popular politically as it tries to fix the banks by fixing consumers," but that using government funds to create the rate reducement, "could be very expensive," especially with the  current rising of the mortgage rates.

 

Another important factor to be introduced, is to expand home buyer credit. Democrat Senate Budget Committee Chairman Kent Conrad from ND, said that he would push expanding a temporary $7,500 credit currently available only to first time home buyers, so that it would apply to all primary residence purchases. Other Republican senators would like to increase said $7,500 to $15,000. As stands, the credit will not be available for individuals making more then $75,000 or couples with over $150,000.  Also, the Senate recovery package removes the current law requirement that credit be repaid by buyers over time.