The big debate in Washington has shifted from the housing market's woes to the national economy -- and how to keep it out of a serious recession.

Federal Reserve chairman Ben Bernanke has been meeting with Treasury and White House officials and leaders of both parties on Capitol Hill. A consensus appears to be building for a $100 billion, quick, one-time-only fiscal shot in the arm that's likely to involve tax rebates for consumers to put more cash in their pockets, plus tax incentives for employers to hire more workers.

There could even be a temporary cut in corporate income tax rates -- at least that's what some Republicans would like to see.

But homeowners are certain to be a crucial focus for any stimulus package that gets bipartisan support: There are proposals for emergency assistance to owners who need extra money to help with high heating bills this winter. There are also proposals to greatly expand loan modifications and payment relief for borrowers heading for serious delinquency or foreclosure.

Treasury Secretary Henry Paulson has even begun pushing Wall Street and the mortgage industry to widen out their "rate freeze" mortgage relief programs beyond just subprime borrowers into the ranks of ALL borrowers -- those with prime credit included -- who find themselves in trouble on their mortgages.

You can bank on a lot of other foreclosure-prevention features in the stimulus plan as well, including millions of dollars in new assistance for local nonprofit counseling groups who reach out and guide mortgage borrowers in danger of losing their houses.

Another top prospect for the package -- a quick amendment to the federal tax code that would allow state and local housing agencies to issue tax-exempt bonds for refinancing the loans of troubled homeowners at low, fixed rates, not just assisting new home purchasers, as the law requires at present.

A number of legislators -- mainly Democrats -- want the package to include an outright moratorium on foreclosures nationwide, plus a legislative amendment allowing bankruptcy court judges to unilaterally reduce homeowners' mortgage debts to lenders.

Don't count on either of these last two hot potatoes: Not only are bankers and the mortgage industry vigorously fighting both ideas, they've got the votes to block them -- in the Senate, and most importantly, in the Oval Office.,

Check back. We'll keep you totally up to date on the emerging stimulus plans, and how they might affect real estate.

Published: January 21, 2008

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consmer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.