Washington, D.C.–President George W. Bush signed into law today a comprehensive package of housing legislation including broad authority for the Treasury Department to safeguard Fannie Mae and Freddie Mac and a plan to help hundreds of thousands facing the possibility of foreclosure.Bush signed the legislation, which Congress approved last week, authorizing the Treasury to rescue Fannie Mae and Freddie Mac if the need arises. Partly to accommodate the rescue plan for the mortgage companies, the bill raises the national debt ceiling to $10.6 trillion, an increase of $800 billion.\u201cOn a macro level, this is touted as a cure-all but when you read the bill, you realize that the money will help a small percentage of the people affected by this crisis,\u201d Dan Gorczycki, managing director, Savills Granite, tells MHN. \u201cThis is not going to have a wide sweeping impact. Even if it prevents 400,000 people from foreclosure, it is not enough because eventually this number is going to go up to 6 million.\u201dThe law includes a plan to help 400,000 homeowners pay off their troubled mortgages and replace them with more affordable, government-insured loans. The program is voluntary and the lenders must agree to take a sizable loss, reducing the principal of each loan, before they can be refinanced. The housing law authorizes the Federal Housing Administration to insure up to the $300 billion in such loans.But a lot of people are asking the question–what about me? according to Gorczycki. \u201cFor example, the servicers who are going to end up paying taxes on delinquent loans,\u201d he says.He believes this bill is merely a confidence builder for many- a reassurance that something is being done to solve all these problems.\u201cIn addition, dispersing the 300 billion in federally insured mortgages for 400,000 people is going to be a slow moving bureaucratic process and even then it is a very small piece of the overall market,\u201d Gorczycki concludes.Others such as the National Multi Housing Council (NMHC), the National Apartment Association (NAA) and the National Association of Home Builders (NAHB) are pleased with the law.\u201cWe commend Congress for including provisions to expand and restore liquidity to the federal tax credit program to support the production of affordable rental housing,\u201d says Jim Arbury, NMHC\/NAA senior vice president of Government Affairs. \u201cThe program, known as the Low Income Housing Tax Credit (LIHTC) program, has become an unintended victim of the single-family meltdown and the credit crisis it created.\u201d\u201cMost importantly, we commend lawmakers for significantly trimming the superfluous homeownership incentives originally proposed for the bill,\u201d Arbury continues. \u201cLawmakers also wisely rejected calls for a $15,000 tax credit for people who buy foreclosed houses. Such a credit would have likely increased foreclosures, accelerated housing price declines and done nothing to increase housing demand,\u201d he says.NAHB President Sandy Dunn says, \u201cThis milestone law contains several provisions to get home buyers back into the marketplace, stop the slide in home prices, provide a lifeline to borrowers facing foreclosure, improve mortgage liquidity and bolster confidence in Fannie Mae and Freddie Mac.\u201dThis article first appeared on www.multihousingnews.com, affiliated with Multi-Housing News magazine.<\/p>\n","protected":false},"excerpt":{"rendered":"
Washington, D.C.–President George W. Bush signed into law today a comprehensive package of housing legislation including broad authority for the Treasury Department to safeguard Fannie Mae and Freddie Mac and a plan to help hundreds of thousands facing the possibility of foreclosure.Bush signed the legislation, which Congress approved last week, authorizing the Treasury to rescue…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1003833559","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n