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The Prime intention of introducing the Housing and Economic Recovery Act was to restore public confidence in the loan-providing government-sponsored enterprises (GSEs) mainly, Fannie Mae and Freddie Mac. <\/b><\/p>
The act created Federal Housing Finance Agency (FHFA) which permitted states to refinance subprime mortgages with mortgage bonds. <\/b><\/p>
The FHFA used its newly acquired powers to place Fannie Mae and Freddie Mac into supervision in 2008. Under the Housing and Economic Recovery Act, there were some sub-acts included.<\/b><\/p>\n
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Housing Assistance Tax Act of 2008: This sub-act provides first-time buyers with a significant tax credit of 10 percent of the purchase price of residential homes, payable in equal installments over 15 years. <\/b><\/p>
However, there are certain conditions attached to this, including a maximum $7,500 limit on the property purchase price. Additionally, these benefits are limited to real estate purchases made between April 9, 2008, and July 1, 2009. <\/b><\/p>
Also, homebuyers with annual incomes greater than $75,000 for an individual return and $150,000 for a joint return are considered ineligible for this tax credit. However, homebuyers renovating abandoned or foreclosed homes were eligible to receive this tax credit.<\/b><\/p>\n
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FHA Modernization Act of 2008: This sub-act expanded the FHA by increasing the loan limit from 95 percent to 110 percent of the median home price. Allowing up to 150 percent of the GSE loan limit or $625,000, further required a minimum down payment of 3.5 percent to qualify for an FHA loan. <\/b><\/p>
It also imposed a one-year moratorium on the US Department of Housing and Urban Development (HUD) on high-risk premiums. <\/b><\/p>
This sub-act also prohibits seller financing options and allows the FHA to provide insurance coverage for up to $300 billion in 30-year fixed-rate refinance loans of up to 90 percent of appraised market value for financially distressed mortgagees. <\/b><\/p>
The sub-act applies to all mortgages originated before or before January 1, 2008.<\/b><\/p>\n
Safe and Fair Mortgage Licensing Enforcement Act of 2008: This law requires all states to establish a licensing and registration system for mortgage originators. <\/b><\/p>
States can choose to operate their systems that are subject to strict federal guidelines, or they can join the Nationwide Multistate Licensing System and Registry also known as NMLS.<\/b><\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t