Effects of the New Housing Bill

A new bill set to be signed by the President later this week will allow the federal government to step in and help the collapsing housing market. The bill will grant the Treasury Department the ability to safeguard two of the nations largest mortgage finance giants (Fannie Mae and Freddie Mac) from collapsing. It is said to be the boldest attempt to aide troubled borrowers since the New Deals Home Owners’ Loan Corporation in 1933.

As the government moves in to offer relief the banks will have the opportunity to supply the homeowner with refinanced loans and loan modifications, and keep the foreclosure rates from sky rocketing further than they have already.

If all goes as planned at risk borrowers will be able to get a handle on their unbearable mortgages with a fixed rate loan insured by the FHA. All in all it is a good move forward for the state of the country. It may even be a good deal for mortgage brokers who are assisting homeowners on closing deals with a refinance or loan modification.