Mortgage Relief. This legislation (H.R. 3221) would grant authority to the Treasury Department to extend new credit and buy stock in the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). As described by Congressional Quarterly, “It also would create an independent regulator for the two mortgage giants and the Federal Home Loan Bank System. It would overhaul the Federal Housing Administration and allow it to insure up to $300 billion worth of new, refinanced loans for struggling mortgage borrowers. It also includes a $7,500 tax credit to some first-time homebuyers, higher loan limits for FHA-backed loans, a standard tax deduction for property taxes and revenue-raisers to offset part of the costs. It also would authorize $3.92 billion in grants to states and localities to purchase and rehabilitate foreclosed properties, and increase the federal debt limit to $10.6 trillion.”
The Senate passed H.R. 3221 on July 26, 2008 by a vote of 72-13 (Roll Call 186). We have assigned pluses to the nays because the federal government acting as an insurer, a micromanager of markets, and a wealth redistributor is unconstitutional and will undoubtedly affect market behavior, leading to more and worse market strife.
