The US Senate passed H.R. 3221 (also known as The Housing and Economic Recovery Act of 2008) this morning 72-13 in a rare Saturday session. The legislation now moves to the desk of President Bush, where it’s expected that he will sign the bill sometime this week as an added show of confidence for the nation’s housing and mortgage markets.

This is an historic piece of legislation and it helps not only consumers, but the housing and mortgage industries alike…

Here are a few of the highlights of the Act in its current state...

• Raises FHA loan limits to the lesser of 115 percent of the local area median home price or $625,500 (up from $362,790).

• Authorizes $300 billion in loan guarantees through fiscal year 2011 for a voluntary program to help at-risk borrowers refinance into viable mortgages.

• Permanently increases cap on mortgage loans Fannie Mae and Freddie Mac can purchase (“conforming loan limit”) to the lesser of $625,000 or 115 percent of an area’s median home price. Authorizes FHFA to adjust limit according to annual housing price index.

• Creates a new independent agency, the Federal Housing Finance Agency (FHFA), to regulate Fannie Mae, Freddie Mac and the Federal Home Loan Bank System, to be funded through assessments on those GSEs.

I’ll bring you more details on this once it is signed into law by The President. It looks as though the effective date would be October 1, 2008. Stay Tuned!


Jeremy M. Salemson
CEO
Corporate Investors Mortgage Group, Inc.
www.cimginc.com