Picture courtesy of themortgagereports.com

UPDATE 7/26/08!:
The US Congress has passed the housing and GSE bill according to a Reuters report that came out Saturday morning. The Senate as well as President Bush have voted and signed respectively for passage of the bill. The bill allows for a $300 billion fund for troubled homeowners and a monetary lifeline to GSEs Fannie Mae and Freddie Mac.

Economists call this the worst real estate slump since the Great Depression.

This past week the House of Representatives voted for a bill that allows $300 billion for people facing foreclosure who can refinance with Fannie Mae (FNM) and Freddie Mac (FRE). The bill also gives Fannie and Freddie a lifeline through government funds.

In a Dow Jones Newswire article, Connecticut's Senator (D) Chris Dodd was quoted saying, "This is the most important piece of housing legislation in a generation." He expressed his concern along with many other Congress members that housing is at the core of the US' prosperity.

The US House of Representatives have voted in favor, and the bill now awaits the Senate's decision as well as President Bush's signature. President Bush has also shown concern for the well being of these important Government Sponsored Enterprises (GSEs).

Passage of the bill will instill confidence in the housing market and could ignite the turnaround in the real estate market. If Fannie and Freddie receive the government backing, their equity shares will be more appealing and debt issues will be as safe as US bonds.

Although this could create a larger budget deficit for the US in the short-term, the benefits of providing these GSEs with a lifeline will make the US a more investable and prosperous nation.









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