U.S. Rep. Tom Graves.DALTON, Ga. – U.S. Rep. Tom Graves says his legislation allowing homeowners to dip into their retirement accounts to avoid foreclosure will help stabilize the housing market.
Speaking Wednesday in Dalton, Graves, R-Ga., said the HOME Act, sponsored by Sen. Johnny Isakson, R-Ga., in the Senate, would eliminate the federal penalty on early withdrawals from 401(k) accounts if the money was used to make timely mortgage payments.
HOME stands for the Hardship Outlays to protect Mortgagee Equity Act.
Under the current setup, homeowners can use money in their 401(k) to pay their mortgages or anything else, but they face a 10 percent penalty for early withdrawal.
“Why should the federal government benefit from the hardships of Americans?” Graves asked.