Yesterday Sentor Chris Dodd (D) and Senator Richard Shelby (R) two head of the banking committee in the Senate announced an agreement was reached. The revised bill eliminates the use of taxpayer money to bail out lenders and spec investors. The Senate version puts the financing responsibility on Fannie Mae and Freddie Mac via a foreclosure relief affordable housing fund. They wantt $500 million in available funds to be made in the 1st year. There is a provision that authorizes FHA to guarantee 30 year fixed mortgages after lenders have reworked them to lower balance that reflect current housing prices.
Conforming limits would be increased to a fixed $550,000 in the most expensive markets.
The bill also calls for a new Federal Housing Agency to be formed to oversee both Fannie and Freddie.
We will see if this gets passed or not, the Administrations seems to like it, but like all other proposals it is only going to help so many people. Stay tuned for more......
