Bush Inks Massive Mortgage Relief Bill

Legislation Intended As Lifeline For Struggling Homeowners And Shaky Financial Markets

(CBS/ AP)  President Bush on Wednesday signed a massive housing bill intended to provide mortgage relief for 400,000 struggling homeowners and stabilize financial markets.

Bush signed the bill without any fanfare or signing ceremony, affixing his signature to the measure he once threatened to veto, in the Oval Office in the early morning hours. He was surrounded by top administration officials, including Treasury Secretary Henry Paulson and Housing Secretary Steve Preston.

"We look forward to put in place new authorities to improve confidence and stability in markets," White House spokesman Tony Fratto said. He said that the Federal Housing Administration would begin right away to implement new policies "intended to keep more deserving American families in their homes."

The measure, regarded as the most significant housing legislation in decades, lets homeowners who cannot afford their payments refinance into more affordable government-backed loans rather than losing their homes.

It offers a temporary financial lifeline to troubled mortgage companies Fannie Mae and Freddie Mac and tightens controls over the two government-sponsored businesses.

The House passed the bill a week ago; the Senate voted Saturday to send it to the president.

Bush didn't like the version emerging from Congress, and initially said he would veto it, particularly over a provision containing $3.9 billion in neighborhood grants. He contended the money would benefit lenders who helped cause the mortgage meltdown, encouraging them to foreclose rather than work with borrowers.

But he withdrew that threat early last week, saying hurting homeowners could not wait — and even blaming the Democratic Congress' delays in action for forcing an imperfect solution.

Meanwhile, many Republicans, particularly those from areas hit hardest by housing woes, were eager to get behind a housing rescue as they looked ahead to tough re-election contests. Paulson's request for the emergency power to rescue Fannie Mae and Freddie Mac helped push through the measure. So did the creation of a regulator with stronger reins on the government-sponsored companies, as Republicans long have sought.

Democrats won cherished priorities in the bargain: the aid for homeowners, a permanent affordable housing fund financed by Fannie Mae and Freddie Mac, and the neighborhood grants.

The bill takes several approaches to curing the ailing housing market.

It aims to spare an estimated 400,000 debt-strapped homeowners, many of whom owe more their houses are worth, from foreclosure by allowing them to get more affordable mortgages backed by the Federal Housing Administration.

The FHA could insure $300 billion in such mortgages, which would be available to homeowners who showed they could afford a new loan. Banks would first have to agree to take a large loss on the existing loans in exchange for avoiding an often-costly foreclosure.

The plan also is designed to relieve a broader credit crunch that has taken hold because of rising defaults and falling home values. To free up safer and more affordable mortgage credit, the bill permanently would increase to $625,000 the size of home loans that Fannie Mae and Freddie Mac can buy and the FHA can insure. They also could buy and back mortgages 15 percent higher than the median home price in certain areas.

It goes far beyond addressing the current crisis, however.

The legislation overhauls the Depression-era FHA. It requires lenders to show how high a borrower's payment could get under the terms of his mortgage. It provides $180 million in pre-foreclosure counseling for struggling homeowners.

The Treasury Department gains unlimited power, until the end of 2009, to lend money to Fannie Mae and Freddie Mac or buy their stock should they need it. The Federal Reserve takes on a new "consultative" role overseeing the companies.

The measure includes $15 billion in tax cuts, including a significant expansion of the low-income housing tax credit and a credit of up to $7,500 for first-time home buyers for houses purchased between April 9, 2008, and July 1, 2009.

Democratic leaders, recognizing that the measure could be one of the last items to become law during what's left of their abbreviated election-year schedule, tacked on an $800 billion increase, to $10.6 trillion, in the statutory limit on the national debt.

Conservative Republicans were vehemently opposed to the bill, particularly the help for Fannie Mae and Freddie Mac. Critics charge the companies enjoy lavish profits in good times and wield their outsized political clout to resist regulation while depending on the government to bail them out should they falter.

[marfly2008]

why did you buy a house you couldn''t afford? Now I have to pay for your greediness...

To our government:
why are you allowing this theivery from the banks, investors, loan officers, realtors,...? is there no sense of right and wrong anymore? we use to be an honest nation...

[stupidrules3]

There are 2.8 million homeowners in danger of foreclosure. This bill is supposed to bail out 400,000 homeowners. Hmmmmm, I wonder how that is going to work? Government cheese for one out of seven. This ought to be interesting.

[teekaa1]

This is just insane!! A home mortgage should give one pause to think and plan if unforseen circumstances arise in your lives!! Don''t whine to the nation if you are living beyone your means!! Perhaps your mortgages should be more modest instead of homes that you can ill afford!! I know how this will work--John Q. Taxpayer will pick up this tab and Georgie and Dickey will skip on down the yellow brick road because they have no concern for the future!!

[whitemale08]

why would anyone pay to be upside down in their mortgage?

Home prices are still going to fall and these clown like Paulson and Bush know this.

There is no new "credit bubble" to revive the economy; that was it.

All Paulson and Bush did today was hop in the "get away" car with the loot for Wall Street.

Thx Georgie and you Repubs, you obviously don''t give a da** about what your Republican heros do to America.

[randynason]

Yes, of course- Bush was practically p-ing his pants to bail out Fannie Mae and Freddie Mac, seeing as the Saudis and Chinese own the majority of the stock. Otherwise, he could have cared less to help out the American stockholders and lend them a hand.

[ajaxtheleast]

THE YOUNG REPUBLICANS

"Jake, understand Rod had himself an
accident while text-messaging, had to
marry the girl and is now the
father of septuplets!"

"Yeh bad news man. But he got a web
scam offering advice to avoid such for
a ten-percent investment in something
or other."

[lucasnico]

most of these comments coming from whiners and loers are anti-bush ... not me - THANK you, uncle george for helping us w/ this mortgage meltdown

Posted by sociald63 at 06:19 PM : Jul 30, 2008

thank you uncle George? only a relative could love this guy.

[tchrman1]

I am getting money I don''t deserve! Part of this bill gives 1st-time homebuyers a $7,500 tax credit. (It functions as an interest-free loan over 15 years) Why is the government giving me this money? I didn''t do anything to earn it. Also, did you know that the definition of a 1st-time homebuyer is someone who didn''t own a home during the past 3 years? It has nothing to do with buying your first home. YES, I am taking the money. All I can say is "What a country"!

[ivj3pa]

Everybody has a voice. Everybody has a need. A roof over our heads is not only a home, but to most it is their life. Each and every one of us has to worry about where we will lay our head. Democrat, Republican, Independent, whatever! I''m a hard working American. From a teenage single parent drop out to a college graduate, I achieved the American dream. Poor mortgage lending practices to cut-throat brokers, I am now drowning and fighting to keep my home. Each and every person on this planet deserves a place to live. No matter the color, creed, historical background, or not even their status matters. We are all human beings that deserve a chance. We deserve a place to live. For one, I am greatful for this bill passing. Perhaps, I may keep my American dream. I hope you all do too.

[mercurygrand]

Lets bail out the small biz owners. They pay all the taxes get no help from congress or the Prez. Instead the big bad mortgage companies get Bail out. The crooks,
that over paid themselves. Took loans from people who should have stayed in the apartments.

[haoli25]

This bill also allows the IRS to spy on ALL of your credit card purchases.

The KGB would be proud of you ''Bushie''.

[sociald63]

most of these comments coming from whiners and loers are anti-bush ... not me - THANK you, uncle george for helping us w/ this mortgage meltdown

[l8c6]

Lets see, did all the billions of dollars spent in Iraq go to make americans safe, nope, it but those billions or is it trillions went to make defense contractors very well off. This money won''t help borrowers as much as it will build more capital for the oligarchs.

[l8c6]

Bush signs inflation bill, republicans will blame the next adminstration. The repugs did that with Carter and still do.

[papabc]

Is an election year. There was enough vote to over-ride a VETO.

Members of Congress will Screw citizens to keep their seat.

[consciousnes]

How much more of our money are we going to give away?
First illegal aliens and now people who are too dumb to read what they are signing.

[sepa2]

History is repeating it self. Lapse regulation lead to S&L scandal in 1989 costing Tax payers (I think) even more. Majority of people provide for themselves through honest work that also help others. But chosen few (lawyers, MBAs, brokers, bankers, politicians....) make tons of money using loop holes and ultimately tax payers have to shoulder it.

[hasher471]

I''m not convinced this is a good bill.
I wish Congress would''ve allowed for public debate on this.
The only people I think should be receiving help are people that have undergone some catastropic event..like losing a job or medical problems.

If somebody bought to much house..tough luck!
If lenders gave out loans to people that shouldn''t have gotten them..tough luck. They get the house back as collateral.

[hasher471]

"Bush didn''t like the version emerging from Congress, and initially said he would veto it, particularly over a provision containing $3.9 billion in neighborhood grants. He contended the money would benefit lenders who helped cause the mortgage meltdown, encouraging them to foreclose rather than work with borrowers.

But he withdrew that threat early last week, saying.... "

TRANSLATION: Bush was advised that the one of the biggest contributors to the REPUBLICANS are these lenders.

[fstop100]

Let the mortgage companies go belly up, save the homeowners.