Two Georgia Republican members of Congress want to help struggling homeowners make their mortgage payments. It's a push to allow penalty-free withdrawls from retirement savings.
Senator Johnny Isakson and north Georgia congressman Tom Graves are co-sponsoring a bill to allow homeowners to tap their 401-K accounts to pay their mortgage. The legislation would allow people to avoid the typical 10 percent penalty for early withdrawl.
Currently, medical expenses and college education are two reasons for tax-free early withdrawl.
Isakson says homeowners need help during a critical time in the economy’s sputtering recovery.
“To be able to stay in their home, reduce their indebtedness and ride this storm out. Because housing will come back, and when it does, we want people in their houses so they can realize the benefit of it.”
Georgia is fifth in the nation in the number of foreclosures according to RealtyTrac.
Bill Adams owns Adams Realty in Atlanta. He says this bill could boost under-water homeowners.
“It would free-up a decent percentage of the market…I think at least 20 to 30 percent of the market is probably in that situation where they’re stuck and they can’t sell right now.”
Isakson expects the legislation will be introduced this week.