The Emergency Economic Stabilization Act of 2008 did pass on October 3rd. What does this mean?

At this time there is a lot of uncertainty. There is concern on whether this will be enough to ease the world credit and economic issues.

This should provide asset relief to financial institutions. It will take some time to see how this Act will help the general population.
The relief will not be immediate, however some relief should be on its way to “Main Street”.

A few items in this bill include:

It also allows the financial industry to have the opportunity to contract with the federal government to manage to troubled assets.

This bill mandates foreclosure mitigation efforts, loan modification and restructuring efforts and allow tenants current on their rent to remain in their homes post-foreclosure.

The President will be required to submit a legislative proposal of reimbursement of the government by the financial industry for any losses the government sustained.

A temporary increase of FDIC insurance coverage to insure accounts up to $250,000.

A limit has been set on executive compensation.

To increase marketability of troubled assets the Secretary will set a premium at which a financial institution can get a guarantee of payment, principle and interest on a troubled asset.

Market to Market Accounting can be suspended by the authority of the Securities and Exchange Commission.

Secretary can consider providing financial assistance to financial institutions that have a drop in capital levels as a result of the Fannie Mae and Freddie Mac preferred stock.

I will continue to inform you of any “market movers”!
Melinda Movick
Mortgage Lending Officer