Congress’ massive mortgage bailout

To prevent the total meltdown of the housing market, Congress has enacted a massive federal bailout to protect homeowners from foreclosure and shore up the giant mortgage lenders Fannie Mae and Freddie Mac.

What happened

In an effort to prevent the total meltdown of the housing market, Congress has enacted a massive federal bailout to protect homeowners from foreclosure and shore up the giant mortgage lenders Fannie Mae and Freddie Mac. The 694-page legislation, signed into law by President Bush this week, is designed to help struggling homeowners trade their skyrocketing adjustable-rate mortgages for cheaper, fixed ones. The number of households facing foreclosure has more than doubled from a year ago, and officials said the bill may save 400,000 home­owners from going into default. “We sent a message to American families that help is on the way,” said Senate Banking Committee Chairman Christopher Dodd.

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