The Senate's newest sham proposal to "help" homeowners facing foreclosure has come under heavy criticism from nearly everyone who is not a politician, and even some who are. The "Foreclosure Prevention Act" does little to provide assistance in helping people keep their homes; rather, it benefits banks and homebuilders who purchase foreclosures away from homeowners.

This may make it slightly easier for homeowners to sell, but does nothing to help those who are simply trying to save their homes. In fact, providing tax credits and other incentives for banks to buy foreclosures properties actually encourages mortgage companies to keep foreclosing on these properties instead of working with their clients to find solutions.

Although the bill has not yet passed both chambers of Congress and has not been signed into law by the president, some of these offensive provisions will most likely find their way into the final version of the act. The tax credits going to the banks and builders will most likely stay, as they are purported to help homeowners get out of foreclosure, when in fact they only promote more foreclosures.

Banks and builders will be able to report losses on properties back four years instead of two, as is the case now. In addition, these parties will be able to take a $7,000 tax break when they buy foreclosure properties. Since it is usually foreclosing banks that purchase homes at county sheriff sales, they may be able to take literally thousands of tax breaks just by foreclosing even faster on homeowners.

The builders, on the other hand, will be able to keep putting up homes no one can afford in areas no one wants to live in. Providing subsidies to builders to keep constructing or repairing properties only puts more houses on the market for sale, driving down home prices even further but allowing the homebuilding companies to stay in business at the expense of other members of the general public.

Not surprisingly, the $7,000 tax credit for purchasing foreclosed properties lasts only for the next 12 months, at which time it will expire if not extended. The largest purchasers of foreclosure homes in the next year will be the largest lenders, who are experiencing the fallout of lending to people who could not afford their mortgage payments.

Twelve months of foreclosures could potentially create hundreds of billions of dollars in tax credits for buyers, most of which will help banks offset losses on these loans. With the banks now writing down their valueless mortgages by tens of billions of dollars, it will be a welcome relief to offset those losses with hundreds of tax breaks they receive by stealing homes from property owners.

It should be little wonder why the Foreclosure Prevention Act has met with so much criticism. The market will find ways to help homeowners save their homes or leave them, but giving more tax breaks to the banks and builders that profited most from the real estate bubble, just to make sure they do not feel the same level of pain as the homeowners, will only lead to more unintended consequences.

Homeowners who know their banks are receiving hundreds of billions of dollars in direct subsidies and hundreds more in tax credits may be far less willing to give up their home peacefully. It is repeated government interventions on the side of big business at the expense of the public that helps foster the animosity that leads to properties being stripped of copper pipes, appliances, and other valuable fixtures.

It can be very hard to blame the homeowners for taking some psychological and physical revenge against the banks who not only steal their homes, but also benefit most from the foreclosure crisis. And all of this is paid for by the people who are losing their homes in record numbers throughout the country.

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