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Bono Mack: Housing Crisis Demands Action

Press Release

Location: Washington, DC


Congresswoman Mary Bono Mack (CA-45) today voted to help millions of Americans deal with the current mortgage crisis and restore stability to the housing market and mortgage finance institutions. The comprehensive housing legislation, the Foreclosure Prevention Act of 2008, H.R. 3221, passed in the U.S. House of Representatives by a vote of 272-152.

"The cost of inaction is far too great," said Bono Mack. "While far from perfect, this legislation is a necessary step to providing relief for American families and helping them regain footing during a tough economic time. This housing crisis affects us all - from those who are struggling to keep their homes to the many Americans who are seeing their communities devastated by a growing number of foreclosures.

"Unfortunately, residents in our region are being hit especially hard by this crisis in home mortgages. Foreclosure rates are up throughout the country, and it is clear that Congress must act now to restore stability and confidence in our housing market and help preserve the American dream of homeownership."

Bono Mack notes that a key provision of H.R. 3221 will provide government backing for the struggling government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac and increase regulatory oversight of these institutions, ensuring more responsible lending practices. The bill will also raise GSE loan limits up to $625,000 and provide an additional $180 million for housing and credit counseling.

Key measures of the Foreclosure Prevention Act of 2008 will:

* Provide an additional $300 in FHA authority to allow troubled borrowers refinance into FHA backed loans;
* Increase the Treasury's authority under existing lines of credit to Freddie Mac, Fannie Mae, and the Federal Home Loan Banks for the next 18 months, giving Treasury standby authority to buy stock or debt in those companies;
* Establish a new regulator - the Federal Housing Finance Agency (FHFA), to oversee Fannie Mae, Freddie Mac;
* Raise the GSE loan limits in high cost areas (to 115% of the local area median home price, not to exceed a nationwide loan ceiling of $625,500); and
* Provide a 7,500 tax credit to first time homebuyers.

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