Though the final details won't be nailed down until both the House and the White House weigh in with their own changes, the odds now look good that some sort of bipartisan legislative package will move forward.
Among the key components in the Senate's initial plan:
Upgrading the FHA mortgage program with permanent new loan limits. The statutory maximum would be increased to $550,000 in high cost markets. That limit would kick in after Dec. 31, when the temporary "super jumbo" limits up to $730,000 authorized by the economic stimulus legislation expire.
A $4 billion fix-up fund to be shared by communities experiencing high rates of foreclosure and vacant, deteriorating houses. The money could be used by local governments to acquire, rehab, and resell the properties to private or nonprofit owners.
One hundred million dollars in additional funding to support housing counseling services that work with delinquent homeowners to avoid foreclosure.
Tougher financial penalties - up to $4,000 per violation - for lenders who do not provide timely truth-in-lending disclosures about loan terms to borrowers.
New federal tax deductions for an estimated 28 million homeowners who do not itemize on their income tax filings. They'd be eligible to take a standardized writeoff of between $500 for single taxpayers, and $1,000 for married owners filing jointly, in lieu of local and state property tax deductions.
Up to $10 billion in new tax-exempt bond authority for local and state housing agencies to refinance subprime borrowers facing payment increases they can't afford.
A $6 billion tax benefit for home builders, allowing them to write off net operating losses that extend back four years, double the current two year limit.
And finally: A non-refundable $7,000 tax credit for buyers of foreclosed homes. This is intended to be an incentive to get these properties off the market, and into productive use, quickly.
The bipartisan relief effort announced last week drew lots of critics, who were mainly upset by what got left out. Consumer groups were particularly angry that Republicans blocked a Democratic plan allowing bankruptcy judges to reduce borrowers' mortgage debts to lenders. They also complained that too much relief is going to builders, and not enough to ordinary homeowners struggling to make payments.
However this all finally gets straightened out, Congress clearly is trying to send a message to the voters back home: Hey, we're really doing something about the housing crisis out here . So please - please -- don't punish us this November.
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