WASHINGTON – The Senate – in a rare Saturday session – approved a massive housing rescue package, which includes provisions to bail out both troubled homeowners and secondary mortgage market giants Fannie Mae and Freddie Mac.
The most important provisions for credit unions would encourage billions of dollars in refinanced mortgages by providing federal backing through the Federal Housing Administration, as well as new tax breaks for first time home buyers.
The bill will create new government backing for Fannie and Freddie by raising the guaranteed lines of credit with the Treasury to as much as $300 billion each, from the current $2.5 billion, and by allowing the federal government to buy stock in the two during times of crisis.
“While we have some reservations about certain segments of the legislation, we recognize overall that it is a major bill that should move ahead,” said NAFCU President Fred Becker after Saturday’s vote. “Ultimately, we believe this groundswell of support sends a very clear, positive message to the president and we hope that he will see fit to sign this legislation directly.”
The bill, which is expected to be signed into law by President Bush, also resurrects a long-stalled effort to create a new regulator for both Fannie, Freddie and the 12 Federal Home Loan Banks, provides $4 billion to states and municipalities to buy foreclosed properties, and provides $180 million to states for homeownership counseling.
