Cantor to propose ‘Responsible Homeowners Act’

Rep. Eric I. Cantor, R-7th, plans to propose in Washington today the Responsible Homeowners Act, which would use market incentives to spur a revival in housing.

Cantor, a former homebuilder who was chairman of a task force that wrote the bill, said in a phone interview that the proposed legislation would make use of a $5,000 refinancing tax credit to assist homeowners out of mortgage difficulties.

The credit could be used to cover the closing costs associated with a refinancing, said Cantor, the No. 2 Republican in the House of Representatives. The average closing costs associated with refinancing a $200,000 loan are $3,118, he said.

Democrats have proposed an $8,000 tax credit, but it would be available to first-time buyers only.

For homeowners who are "under water," meaning their home value is less than the mortgage, the measure could be used to increase their equity and thus qualify for refinancing, he said.

"We're trying to put private capital back into the home market and not relying on the government to buy up [housing] inventory," Cantor said.

Republicans have been painted by Democrats as obstructionists trying to block Democratic legislation. Cantor said the GOP has proposed alternative solutions that rely more on the private sector than government stimulus funds. -- Tyler Whitley