Bush Signs Historic Housing and Economic Recovery Act
July 30th, 2008 Categories: Real Estate News
Shortly after 7am this morning, President Bush signed the Housing and Economic Recovery Act of 2008. Widely known as a stimulus package designed to prevent further foreclosures, the bill covers a number of other areas including:
- Higher Loan Limits – raises the GSE (government sponsored enterprise), FHA and VA single-family loan limits on a permanent basis.
- GSE Regulatory Reform - increases regulation of Fannie Mae, Freddie Mac and the Federal Home Loan Banks (GSEs) by creating a new regulator and regulatory requirements.
- GSE Stabilization – establishes several new powers and authorities to stabilize the GSEs in the event of financial crises.
- Affordable Housing Trust Fund – creates from assessments on the GSEs businesses a fund to help prevent foreclosures and facilitate affordable housing.
- Licensing – encourages a nation-wide licensing and registry system for loan originators by setting minimum qualifications and assigning HUD responsibility for establishing requirements for those states not enacting licensing laws.
- Active Service Members – extends stays of foreclosure and legal proceedings from 90 days to 9 months and extends the 6 percent mortgage rate cap for one year after active duty.
- Truth in Lending Act (TILA) – adds new mortgage disclosure requirements under TILA.
- Veterans Matters- provides home improvement benefits for the disabled.
- FHA Rescue Plan - authorizes a new FHA “Hope for Homeowners Program” to refinance existing borrowers into fixed rate FHA mortgage products.
- FHA Modernization - modernizes FHA programs.
- Redevelopment of Abandoned and Foreclosed Homes – authorizes $4 billion in block grant funds for states to purchase and redevelop foreclosed properties.
- Counseling - authorizes funds for the Neighborhood Reinvestment Corporation (NRC)
- Public Housing Authorities – reduces regulatory requirements for smaller PHAs
- Tax Incentives - establishes a range of tax incentives, including first-time home buyer tax credits and expands the Low-Income Housing Tax Credit.
- Real Estate Investment Trusts (REITs) – loosens certain restrictions on REITs.
- Public Debt Limit – increases the Federal debt limit to $10.615 trillion.
Thanks to our Preferred Mortgage Broker Rob Clark and the Mortgage Bankers Association for this helpful overview. The full summary of the the Housing and Economic Recovery Act is available here.
For more information or specifics on the higher loan limits, call me at 703.927.4554.
Michael
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Michael, you did a great job summarizing this housing bill for your Alexandria readers. ‘Love your blog site!
Thanks Margaret. The higher loan limits will need to be a post unto themselves based on the early material that I’ve seen. Always happy to have you visit.
Michael
[...] “Bush Signs Historic Housing & Economic Recovery Act” – By: Michael Bergin of GWSleptHere.com (Blogging Since: Jan. 30th 2008) [...]
Those who bought what they could afford have still lost a ton of equity but since they made a “smart” decision by buying in their means don’t have the luxury of having their principal adjusted downwards. The government should also take 100% of any capital appreciation they may realize in the future so as not to have regular tax payers subsidize this.
Roger,
No doubt this bill has its imperfections, I think everyone is holding their breath to see what happens next.
Michael
[...] This will soon change to 3.5% as part of the recent housing bill passed by Congress and signed by President [...]