Broad congressional legislation designed to help the troubled housing market may have a chance of becoming law earlier than anticipated.
Emergency legislation designed to stabilize Freddie Mac & Fannie Mae, may be attached to the larger congressional housing initiative to expedite its passage into law.
As late as last week Freddie Mac & Fannie Mae, the two GSE's (Government Sponsored Enterprises) that hold or guarantee more than $5 trillion, or almost half the nation's total mortgages were feared to be in danger of collapse. The government takeover of Indy Mac Bancorp lead to these rumors, so emergency legislation was presented Sunday by the Treasury department and the Federal Reserve to aid in further capitalization of these to companies to strengthen confidence in the troubled mortgage industry.
To accelerate the legislative process, the emergency legislation is being added to a larger congressional housing measure that has been recently bogged down by haggling between house and senate democrats.
The larger measure, with contributions from Senators Chris Dodd, D-Conn & Richard Shelby, R- AL, includes tighter oversight of Fannie Mae & Freddie Mac, but the main focus of the housing measure includes federal guarantees for troubled mortgage holders in exchange for fractional write-downs of the loans. New federal requirements for homeowners to qualify for the aid would be instituted as well.
If this legislation is passed quickly, it will provide the needed public perception of safety in the housing market, and may encourage hesitant potential buyers to enter the market place much sooner than later.