2 months earlier this was the situation

The National Association of Home Builders, one of the top 10 corporate donors to politicians, has stopped contributing to congressional candidates after it failed to get what it wanted in recent anti-recession legislation.

The association had unsuccessfully pressed lawmakers to adopt a provision to reduce the tax liability of home builders by allowing them to offset their past profits with future losses.

Since 1990, the trade group has given nearly $20 million to federal candidates,

But who says nothing gets done in the halls of Congress? When they are motivated, and see their political contributions at risk... boy, they are like a steamroller! In under 60 days...

Homebuilders and the mortgage industry are emerging as big victors in a bipartisan agreement reached by Senate leaders on legislation designed to limit the housing crisis.

The bill contains a $6 billion emergency tax break that would let companies use losses from 2008 and 2009 to offset profits earned over the previous four years, instead of the usual two-year timeframe.

Other big beneficiaries would be Wall Street banks such as Citigroup Inc., Merrill Lynch & Co. and Morgan Stanley.

While Democrats and Republicans called the bill a productive bipartisan compromise, Dean Baker, co-director of the liberal Center for Economic and Policy Research in Washington, questioned whether the trade off was worthwhile for Democrats. "This is first and foremost helping the big villains in the story," he said.

Want to know the name of the bill? Its warm, its fuzzy, its for "the people": Foreclosure Prevention Act of 2008 - I am not making this stuff up. Just more money borrowed from your grandkids which were direct transfers to banks and homebuilders and papered over with cute titles that somehow indicate its focus was to help us in the peasantry.

• Homeowners facing bankruptcy, however, won't find relief in the proposal. The mortgage industry fought fiercely to spike a provision to let bankruptcy judges rewrite the terms of distressed mortgages.

Well on second thought perhaps I should not be surprised that the larger homebuilders did not go bust... I forgot how many handouts D.C. had been involved in - these seem like a pittance compared to what was to come next in summer and fall 2008. Ah we were so young and innocent in spring 2008... But I digress! For now let us see how the home builders will continue to tread water until the next round of handouts begins (the drumbeat gets ever louder for a $15,000 tax credit... now for everyone, not just 1st time buyers).

• In Indio, a small city east of Los Angeles, the supply of foreclosed houses for sale is plentiful. Even so, work crews are finishing a batch of new homes for Lennar Corp. While the recession wiped out many small builders, mortgage lenders and homeowners, the nation's biggest builders have hung on, in part through favorable land deals, loan agreements and tax strategies.
• Now, the worst appears to be over for most of them. Nationwide, new-home sales are showing signs of bottoming out. The stocks of the big home builders have rebounded from their November lows, and some have bolstered their cash and borrowing ability. Lennar and Toll Brothers Inc. each sold $400 million of bonds in April, and Ryland Group Inc. sold $230 million worth, a sign that some investors think these companies will make it.

Most of the story focuses on how Lennar (LEN) - a former holding, navigated these treacherous times but of course many of these tactics applied to many of the larger players.

• A look at how Lennar navigated the worst housing crisis in decades reveals that timely land deals have been critical to its survival.