President Barack Obama is in Colorado today, where he’s scheduled to sign into law at 2:40 p.m. Eastern time the controversial $787 billion stimulus bill passed by Congress last week.

The bill, which backers say will save or create 3 million to 4 million jobs through $575 billion in government appropriations and direct spending plus $212 billion in tax cuts, includes several provisions aimed at boosting home sales.

President Barack Obama, during a visit to Colorado, today signed into law the controversial $787 billion stimulus bill passed by Congress last week.

The bill, which backers say will save or create 3 million to 4 million jobs through $575 billion in government appropriations and direct spending plus $212 billion in tax cuts, includes several provisions aimed at boosting home sales.

HR 1, the American Recovery and Reinvestment Act of 2009, increases the $7,500 limit on an existing tax credit for first-time homebuyers to $8,000, extends its sunset from July 1 to Dec. 1, and eliminates a requirement to repay the credit. A first-time buyer is defined as someone who hasn’t owned a principal residence in the last three years.

In addition, the bill restores the $729,750 upper loan limits for Fannie Mae and Freddie Mac in high-cost housing markets that was in place during much of 2008. The higher limits — first put in place as a temporary measure included in last year’s economic stimulus bill — were bumped down to $625,500 on Jan. 1 (see story).

This new stimulus also bill restores the floor for FHA loan guarantee programs in "normal" markets to $271,050, and gives Obama’s Secretary of Housing, Shaun Donovan, discretion to allow FHA to back home loans of up to 125 percent of the median home price in high-cost markets, with an upper limit of $729,750.

HR 1 also spells out a previous commitment by the Obama administration to spend at least $50 billion from the second round of the $700 billion Troubled Asset Relief Program (TARP) on foreclosure prevention.

The bill mandates that the money be spent on a loan-modification plan that may involve loan guarantees or credit enhancements, reduced loan principal amounts and interest rates, an extension of loan terms, or any combination of similar methods.

The section of HR 1 addressing foreclosure prevention, dubbed the "Help Families Keep Their Homes Act of 2009," also calls for incentive payments to loan servicers of up to $2,000 for each foreclosure they are able to prevent through a short sale, loan modification, workout, or other loss mitigation plan.

Congressional Democrats are also pushing legislation that would give bankruptcy judges the power to modify the terms of troubled borrowers’ loans — including "cram downs" of principal. The Obama administration supports the change, but reportedly did not want to tackle the issue in the already controversial stimulus bill (see story).

The mortgage lending industry opposes giving bankruptcy judges cram-down powers, saying such involuntary, after-the-fact changes to loan terms will raise the cost of borrowing for all consumers.

The New York Times reported today that Democrats plan to include language modifying the bankruptcy code to permit cram-downs in a spending bill that Congress must pass to keep the government funded.

Obama’s foreclosure-prevention plan is expected to include government subsidies to reduce the interest rates of troubled borrowers’ loans, the Times said, with lenders providing matching contributions.

Lenders including JPMorgan, Bank of America, Citi and Morgan Stanley have reportedly instituted temporary foreclosure moratoriums in anticipation of the plan’s rollout, while Fannie Mae and Freddie Mac continue to delay foreclosures.

President Obama is expected to reveal more details about the plan Wednesday in Phoenix.

***

What’s your opinion? Leave your comments below or send a letter to the editor.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×