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Saturday, July 26, 2008

Senate passes crucial bill to help mortgage borrowers

July 26, 2008
On Saturday July 26, 2008 the Senate overwhelmingly passed a landmark housing bill that will offer up to $300 billion in loans for troubled homeowners and establish a government rescue plan for mortgage giants Fannie Mae and Freddie Mac.

The bill has two principal objectives: to offer affordable government-backed mortgages to homeowners at risk of foreclosure, and to bolster Fannie and Freddie with a temporary rescue plan and a new, more stringent regulator.
  • Establish a stronger regulator for the GSEs

  • Permanently increase "conforming loan" limits to a maximum of $625,500 from $417,000.

  • Create home-buyer credit: a tax refund for first-time home buyers worth up to 10% of a home's purchase price but no more than $7,500.

  • Bar down-payment assistance for FHA loans

  • Create an affordable housing trust fund: a permanent fund to promote affordable housing.

  • Give grants to states to buy foreclosed properties: grant up to $4 billion to states to buy and rehabilitate foreclosed properties.

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