Bush signs housing rescue law

President Bush has signed the bill which will try to help borrowers, provide support to Fannie and Freddie and strengthen housing market.This new bill has become a law after high signing it. It will try to help the housing market to make things better for the borrowers. Mortgage finance giants Fannie Mae and Freddie Mac are also will be supported. First the house passed it and then the Senate passed it with 72-13 votes.

The new authority will improve stability and confidence in the housing market, expects the White House. The FHA (Federal Housing Administration) will start implementing the new policies.

This new law, has developed a s a result of Washington’s efforts to tackle the housing market crisis.

The main objectives of this law is-

1. To offer government-backed mortgages to at risk homeowners
2. To support Fannie and Freddie with a temporary rescue plan and with a new and tougher regulator.

The White House first opposed this bill and later reversed its stand after critically examining the whole situation. But still the administration has objections to some parts of the legislation such as providing aid to states for buying foreclosed properties. Still the White House decided to give it a thumbs up to oversee the working of the government sponsored enterprises (GSEs) and finding a stricter regulator.

Helping at-risk borrowers

Some of the provision of the law that will effect borrowers and communities-

1. Federal Housing Administration will be allowed to insure up to $300 billion in new 30-year fixed-rate mortgages;

2. A stronger regulator will oversee the GSEs;

3. An increase in “conforming loan” limits to a maximum of $625,500 from $417,000;

4. Get a tax refund as a first-time home buyer, worth up to 10% of a home’s purchase price but no more than $7,500;

5. No down-payment assistance from sellers;

6. A new affordable housing trust fund;

7. States will get grants to buy foreclosed properties; and

8. Supporting Fannie and Freddie.