Mortgage Daily Logo

Bailout Bill Now Law

Mortgage News

Legislation authorizing the U.S. Treasury Department’s purchase of $700 billion in mortgage assets has been signed into law by President Bush.

H.R.1424, the Emergency Economic Stabilization Act of 2008, was signed today by the president after passing earlier in the U.S. House of Representatives by a vote of 263 to 171.

Today’s passage and signing followed a 74 to 25 approval vote in the Senate on Monday.

The original House proposal died in a vote Monday. Chills ran through Wall Street, which sent the Dow Jones Industrial Average tumbling more than 700 points.

An emboldened Treasury Secretary today said challenges posed to diverse institutions require that rescue package tools be deployed “in combination with the tools the Fed, the Treasury, the FDIC and other bank regulators already have, in a variety of ways that addresses each of these needs and restores the ability of our financial system to fuel our broader economy.”

The bill provides for a $700 billion Troubled Asset Relief Program to be used by the Treasury to purchase illiquid mortgage assets. It also includes a provision to raise federal insurance for bank and credit union deposits to $250,000 from $100,000.

photo of adminsitration, congress
clockwise: Nancy Pelosi, Harry Reid,
George Bush and Henry Paulson

The House approval quickly prompted praise from the Mortgage Bankers Association.

“This will enable financial institutions to offer credit so individuals can purchase homes and other items and businesses can continue to operate and grow,” MBA Chief Operating Officer John A. Courson said in a statement. “The true long term cost of the program may be far less than $700 billion as the Treasury has the discretion to redeem or sell the assets, sometimes at a profit, when the market recovers.”

Business Roundtable, an association of CEOs of leading U.S. companies with annual revenues of $4.5 trillion and nearly 10 million employees, also issued an announcement commending passage of the bill.

The legislation was designed to provide stability and prevent disruption to the fragile U.S. economy and financial system. In addition, the bill provides incentives for energy production and conservation. It also provides individual income tax relief.

“We will move rapidly to implement the new authorities, but we will also move methodically,” Paulson added. “In the coming days we will work with the Federal Reserve and the FDIC to develop strategies that deploy these tools in an expedited and methodical way to maximize effectiveness in strengthening the financial system, so it can continue to play its necessary and vital role supporting the U.S. economy and American jobs.

“Transparency throughout this process will be important.”

A statement earlier from Bush earlier indicated a crisis had been averted.

“There were moments this week when some thought the federal government could not rise to the challenge,” Bush said in a prepared transcript. “We have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country. We have shown the world that the United States of America will stabilize our financial markets and maintain a leading role in the global economy.”

The HOPE NOW Alliance issued a press release saying legal impediments will be reduced for servicers that adjust existing loans — enabling its members to accelerate foreclosure prevention activity.

House Speaker Nancy Pelosi said in a statement after the Senate’s passage Wednesday, “Times of crisis demand decisive bipartisan action and I welcome Senate passage of the economic rescue plan, which includes robust safeguards to ensure that taxpayers are protected through oversight and accountability.”


Senate Passes Fatter Bailout Package
The U.S. Senate passed its own version of a $700 billion mortgage bailout package.

Bailout Defeat Sends Stocks Crashing
The Bush administration’s mortgage bailout bill has been defeated in the House — sending the stock market crashing. Republicans blamed a viscous partisan speech by House Speaker Nancy Pelosi for the collapse.

Related Posts

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Third-Quarter 2012 Mortgage Litigation Index

Lawsuits involving excessive fees, servicing fees and loan fees beyond state maximums. Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story Fannie Mae and Freddie Mac Orangeburg County, Richland County, South...

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Net Branch Lawsuits

Litigation involving net branch operations. Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story PHH Mortgage Corp. Mathews Supreme Court of Virginia na Court held that the term "branch office" includes not only...

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Whistleblower Lawsuits

Litigation related to loan servicing, including escrow issues, transfer of servicing and servicing borrowers in bankruptcy and foreclosure.   Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story Bank of...

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming paperwork has been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and furniture need to...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand-new mortgage loan can be a difficult task, especially for first-time homeowners.   After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first...


Don’t worry, we don’t spam