After vows from the White House of vetoing a bill designed to help rescue homeowners buried under increasing mortgage payments, President Bush quietly approved and signed a new housing bill behind closed doors.  The bill will give the Federal Housing Administration the authority to help homeowners refinance with mortgages backed by the federal government.  Current lenders, however, will have to agree to take a loss on their loans.  The new bill will offer up to $300 billion in loans and will reportedly help as many as 400,000 homeowners refinance and be able to keep their homes. 

This bill also gives the Treasury Department the authority to protect the mortgage giants Freddie Mac and Fannie Mae.  Those who opposed the bill have said it will end up taking money out of the pockets of the taxpayers and putting it in the pockets of the stockholders.  At this time there is no limit to the amount of help Freddie Mac and Fannie Mae will receive.  The two companies own or back nearly half of the country's total mortgages.  The bill puts a cap of $625,500 on Freddie Mac and Fannie Mae in certain higher priced markets and up to 15% over median prices in other areas.

In addition to FHA-insured mortgages the bill will offer a number of other incentives.  One such incentive is the $15 billion in tax breaks such as a $7500 tax credit for first time homebuyers.  This credit is retroactive to April 9, 2008 and is valid until July 1, 2009.  Another incentive is $3.9 billion in grants for communities with the highest forclosure rates.