Well, Pres. Bush finally signed this act a couple of weeks ago, providing some much needed help to suffering homeowners. Although best estimates are that it will benefit only 4-500,000 of those owners in danger of losing their homes to foreclosure, it goes a lot farther than any earlier "solutions" offered by the administration.
Highlights are as follows:
A.) The FHA will be permitted to insure up to $300 Billion in refinanced mortgaged mortgages. This will give lenders an incentive to refi many existing loans that may face default and foreclosure.
B.) Provide $3.9 Billion to local communities to buy and rehab foreclosed properties in especially hard hit areas. This will create a new source of affordable housing and help avoid some blight.
C.) Provide a wide range of new support from the Treasury to both Fannie Mae and Freddie Mac. This support will include purchase of some of their loan portfolios as well as buying stock in the firms. As these two organizations own or guarantee about half of all mortgages in the nation, this is a vital step in re-establishing confidence in the mortgage market while also increasing liquidity for home buyers seeking loans.
D.) Cap loans that Freddie & Fannie can buy, and that FHA can insure, at $625,000. This is higher than the old figure of $417,000, though below the $729,750 temporary limits for high cost regions.
E.) Provide $15 Billion in tax breaks, including a credit of up to $7500 for first time buyers buying between April 9, 2008 and July 1, 2009, as well as a deduction on 2008 property taxes for those taxpayers not itemizing.
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