Housing

The subprime mortgage crisis and tightening credit markets have dealt a blow homeowners and the economy alike.  The shaky real estate market is a major factor in the weakening economy.  The American Housing Rescue and Foreclosure Prevention Act—HR 3221—is a step towards bolstering both.  The centerpiece of the legislation is a package of federal loan guarantees to help responsible homeowners refinance into market-rate mortgages with better terms.  It also created a new independent agency to regulate Fannie Mae, Freddie Mac and the Federal Home Loan Bank System.  Fannie Mae and Freddie Mac are government-sponsored entities that combined hold about $5 trillion worth of mortgage debt.  The legislation also extends tax credits of up to $7,500 for first-time homebuyers, effective until July 1, 2009.  The bipartisan bill also includes provisions sought by the U.S Treasury Secretary as a way to reassure the global debt markets.