Market Memo

Good news for everyone associated with the housing industry, including remodelers, came today when the Senate reached a compromise to move forward on a bill that will limit the default mess to the tune of $500 Billion. 

If enacted, Fannie Mae and Freddie Mac would create a fund that would allow distressed borrowers to get financing through the fund. The size of the bailout and the government backing of the program should give lenders the confidence they need to work with the tens of thousands of U.S. homeowners who face default.

Will it be enought to shorten or reduce the depth of the housing downturn, only time will tell, but it is a promising step in the right direction agree many reports. You can link to them below.

The Washington Post

Reuters

The Federal Housing Finance Regulatory Reform Act of 2008WASHINGTON, DC – Senator Chris Dodd (D-CT) and Senator Richard Shelby (R-AL), Chairman and Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs, today announced that the Committee passed “The Federal Housing Finance Regulatory Reform Act of 2008,” legislation which includes major efforts to help prevent the rising number of foreclosures, to create more affordable housing for Americans, and to reform the regulation of the government-sponsored enterprises (GSEs) in order to improve their role in the housing finance system.  The legislation passed by a vote of 19-2.  A summary of the Manager’s Amendment is attached.“The passage of this bipartisan legislation marks tremendous progress in my ongoing effort to help stabilize our markets and provide relief to hundreds of thousands of Americans who, due to no fault of their own, are struggling to keep their homes,” said Dodd.  “By creating a voluntary initiative to help distressed borrowers refinance their mortgages; establishing a new fund that will help create more affordable housing for millions for Americans; and reforming the GSEs so they are better able to fulfill their mission of providing affordable housing options, this bill addresses the root of our current economic problems – the foreclosure crisis – and takes a step in the right direction toward getting our economy back on track.  I look forward to working with Senator Shelby, Majority Leader Reid and Republican Leader McConnell to bring this bipartisan legislation to the Senate floor.”“I believe the Banking Committee today sent a strong message about the importance of protecting the American taxpayer,” said Shelby.  “This legislation adheres to that principle in creating a strong and flexible GSE regulator, and by ensuring that taxpayer dollars are not used to fund the Hope for Homeowners program.  Today’s action is evidence of the tremendous progress we can make when we work together.  I look forward to working with Chairman Dodd, leadership and the rest of my colleagues as this legislation moves forward.”