Feb. 13, 2008 - Bush signs stimulus package

Effects on the housing market

In a press release, earlier today, the White House released a fact sheet detailing housing benefits of the Economic Stimulus Act of 2008, signed into law by Prseident George W. Bush.  The press release also emphasizes other programs put into place to help some homeowners struggling to pay mortgage loans.

Yesterday, the new Project Lifeline initiative was announced, which will help more Americans keep their homes by giving HOPE NOW servicers a new tool to reach out to seriously delinquent homeowners. Project Lifeline offers, where appropriate, to "pause" the foreclosure process for 30 days while other longer-term solutions are explored. All HOPE NOW servicers are contacting subprime borrowers 120 days before their interest rate resets. The nationwide hotline is (888-995-HOPE).

In August, the President and his Administration launched a new initiative at the Federal Housing Administration (FHA) called FHASecure. FHASecure expands the FHA's ability to offer refinancing by giving it the flexibility to work with homeowners who have good credit histories but cannot afford their current payments.

In December, President Bush signed the Mortgage Forgiveness Debt Relief Act of 2007, which will help Americans avoid foreclosure by protecting families from higher taxes when they refinance their home mortgages. This Act created a three-year window for homeowners to refinance their mortgage and pay no Federal taxes on any debt forgiveness they receive.(more)

The biggest winners in the rescue plan could likely be Americans with more expensive homes who will be able to refinance their mortgages at cheaper fixed rates. The stimulus package temporarily raises the limit on Federal Housing Administration loans and also raise the cap on loans that mortgage giants Fannie Mae and Freddie Mac can buy to a maximum of $729,750.  However, this mazimum limit applies only to "high cost" areas and is not a nation-wide standard. (more)