President Bush has signed into law a sweeping housing rescue bill, a package that promises help for homeowners facing foreclosure, and provides temporary assistance to struggling mortgage finance companies Freddie Mac and Fannie Mae.
A key provision of the Housing and Economic Recovery Act of 2008 authorizes the Federal Housing Administration to insure up to $300 billion in home loans, allowing struggling borrowers to replace sky-high mortgages with more affordable government-backed loans. The legislation also provides a "temporary line of U.S. Treasury credit" to mortgage giants Freddie Mac and Fannie Mae, and "gives the government the option to buy shares in them if they run into trouble," according to Reuters. The Senate gave its approval to the Housing and Economic Recovery Act of 2008 on July 26, three days after passage in the House of Representatives. President Bush signed the bill this morning at the White House. The New York Times calls the housing rescue package "the most aggressive intervention by the government into the housing market in more than a generation, perhaps since the New Deal."