Bush Refinance Act
Fannie Mae and Freddie Mac
The largest part of the bill was an attempt to bail out Fannie Mae and Freddie Mac. The two companies were originally set up by Congress as Government Sponsored Enterprises (GSEs) and were designed to ensure the flow of capital in the mortgage market. According to Marketwatch.com, the bill provided an emergency government-backed safety net for the companies. It also created the Federal Housing Finance Agency as a new oversight body for the two companies. A few months after the bill was passed the government took over the companies as the mortgage crisis deepened.
Hope for Homeowners
The bill set up a range of mechanisms and incentives intended to help homeowners refinance to government-backed 30-year mortgages. The Congressional Budget Office estimated at the time that it would help 400,000 homeowners.
The bill contained a number of provisions to help returning veterans avoid foreclosure. One stated that lenders must wait nine months rather than the standard three months to begin foreclosure proceedings, according to ConsumerAffairs.com. The bill also provided $4 billion to communities to buy and rehabilitate foreclosed and abandoned homes, according to Marketwatch.com.
The Hope For Homeowners Act did not contain the crisis. In addition to the takeover of Fannie Mae and Freddie Mac, foreclosure rates continued to climb into 2009. According to CNNMoney.com, seven months after its passage Hope for Homeowners had helped just one family stay in its home. In May 2009, President Barack Obama signed into law changes to the program intended to bolster participation.
According to Makinghomeaffordable.gov, scam artists have been targeting homeowners who are struggling to meet their mortgage payments. Be sure you understand the rules before entering into agreements with anyone or giving them any money.
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