C R S Report
for Congress
Housing and Economic Recovery Act of 2008
August 19. 2008
"The
Housing and Economic United States Recovery Act of 2008. P1. 110-289. is likely to affect most owner-occupied
housing in the through
a variety of channels. The act creates
a new, stronger. unified
regulator for Fannie Mae, Freddie Mac, and the Federal Home Loan Banks
(the housing GSEs). ...
The act also
modernizes many aspects of the Federal Housing Administration (FHA) In high-cost areas, ... Other provisions lengthen from
90 days to 9 months the stay of foreclosure on service members’ homes and provide additional support for
disabled veterans with special needs. ... Tax provisions in the act include a refundable tax credit based on 10% of the price of a
home purchased by a first time homebuyer."
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CRS Report
Economic Analysis of a Mortgage
Foreclosure Moratorium
September 12, 2008
"On July 26, 2008, Congress passed
legislation creating a voluntary program to enable troubled mortgage borrowers
and lenders to refinance their loans through the Federal Housing Administration
(FHA). Having created the voluntary program, it remains to be seen if people will
be willing and able to participate under current financial market conditions.
...
A moratorium would have costs and
benefits. On the benefit side, it would provide all market participants with more time to assess asset prices and evaluate alternatives. On the cost side,
it could delay the ability of markets to clear excess inventories and restore
financial stability. ...
Evidence from the Great Depression
suggests that states that enacted moratoriums provided relief to some home
owners but saw higher costs of credit and fewer loans compared with states that
did not. It nevertheless has been argued that natural disasters are an
appropriate analogy and that the oncoming schedule of Alt-A mortgage resets
creates time pressure that, in the absence of a moratorium, could overwhelm the
capacity of loan servicers. ..."
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CRS Report
Proposal to Allow Treasury to Buy
Mortgage Related Assets to Address Financial Instability
September 22, 2008
U.S."Financial markets underwent
severe stress during the week of September 15-22, 2008. After Lehman Brothers declared bankruptcy and AIG received a bridge loan from the Federal Reserve,
policymakers reassessed their case-by-case approach to resolving financial
problems. Secretary of the Treasury Paulson announced a plan to allow Treasury
to purchase mortgage-related assets from US financial institutions. The announced intent of the plan is to unclog financial markets, increase the
health of the banking sector, and reduce ongoing risks to the economy. This
report discusses a draft of the proposal as it stood on September 21, 2008, and
analyzes frequently asked questions."
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