Housing and Economic Recovery Act of 2008
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GSE Reforms
(Pages 14 through 394)  A new independent agency of the Federal Government, The Federal Housing Finance Agency is created to regulate Government Sponsored Enterprises, Fannie Mae and Freddie Mac. A director heads the new agency and is appointed by the President to a five-year term. The new agency will have a total of four board members consisting of the Secretary of Treasury, Secretary of HUD, Chairman of SEC and the Director. Eliminated in one year is the Office of Federal Housing Enterprise Oversight. (OFHEO) The new law also provides temporary authority for the Secretary of Treasury to invest in Fannie Mae and Freddie Mac. This authority expires on December 31, 2009.
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Hope for Homeowners
(Pages 394- 422)  The new law allows those who qualify to replace old mortgage loans with 30-year fixed-rate loans for up to 90 percent of the home's current value. This program is voluntary for both lenders and borrowers. The anticipated start date for this program is October 1, 2008. The Federal Housing Administration will insure a total of $300 billion of the loans. Since banks will take a write down on principal balance, they will likely evaluate re-finance requests considering default and weighing costs of foreclosure.
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S.A.F.E. Mortgage
Licensing Act of 2008 (Pages 423 - 461)  This aspect of the legislation sets forth procedures, requirements, education, testing, and standards including mandatory registration and state licensing of mortgage loan originators. The law leaves the registration and administration to the states provided that states meet the requirements set forth in the Act. For states that do not participate in the Registry or do not establish a registration and licensing system for loan originators that meets the requirements of this Act the Secretary of HUD is directed to provide a back-up system for licensing and registration. The Act states it does not preempt state law
which provides greater protection to consumers than this law.
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Housing Assistance
Tax Act of 2008 (Pages 600-694) 
The new law provides a four important tax law changes that impact individuals and small businesses. 1.) First-time homebuyer tax credit of up to $7500 that must be repaid, found on pages 628-637. 2.) Property tax deduction for homeowners that don’t itemize, found on pages 637-638. 3.) Changes to qualifying a vacation home or non-primary residence for tax exemption, found on pages 690-693. 4.) Real estate investments, found on pages 602-674. |
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(Pages 476- 598) 
This section of the new law has also been known as the "Foreclosure Prevention Act of 2008" and "Building American Homeownership Act of 2008". It increases the FHA loan limit from 95 percent to 115 percent of area median home price up to 150 percent of the GSE conforming loan limit, or $625,000, effective January 1, 2009. Eliminates down-payment assistance by sellers. Down payment assistance by family members continues to be permitted. FHA loans will now require a 3.5 % down payment on any FHA loan. Appropriates 4 billion dollars for state and local government agencies to purchase foreclosed homes.
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Pork
 Pork highlights include tax breaks for an unnamed auto partnership that produces 675,000 autos between 1/1/08 and 6/30/08. Chrysler? Pages 675-676.
Another interesting addition is this provision that allows a foreign company, National Steel Car of Canada, to obtain millions of dollars in tax-exempt financing for a railcar manufacturing plant it is already building in Colbert County, Alabama. This is located almost 300 miles from the areas ravaged by Hurricane Katrina. The law expands the Gulf Opportunity Zone (GO Zone) to include Colbert County and Dallas County, Alabama. Pages 680-681 On page 681 you’ll find the passage that increases the debt ceiling on national debt to $10,615,000,000,000. Wow! That’s a big number. That’s ten trillion, six hundred and fifteen billion dollars. I’ll take it in pennies, thank you. |