Foreclosure Prevention Act of 2008

AAA

DEFINITION of 'Foreclosure Prevention Act of 2008'

A housing act that is designed to help families keep homes that are facing foreclosure and stabilize the overall housing market. The American Housing Rescue and Foreclosure Prevention Act of 2008 seeks to achieve this goal through measures such as increased tax credits for low-income households and first time home buyers, and by encouraging the use of housing bonds to finance rental properties and affordable housing projects.

INVESTOPEDIA EXPLAINS 'Foreclosure Prevention Act of 2008'

The American Housing Rescue and Foreclosure Prevention Act of 2008 was passed by Congress on July 26, 2008, and was signed into law by President George W. Bush on July 30, 2008. The housing rescue law does not solve all of the problems created by relaxed subprime lending practices, the bursting of the U.S. housing bubble in 2006 and the effects of a sluggish economy, but it is expected to restore lending and borrowing stability for families in the future.

The bill expanded the available tax programs in an attempt to alleviate the financial pressures on low- and middle-income households. It also attempts to restore confidence in the American credit markets.

Homeowners facing foreclosure should consider all details; however, as conditions apply, and application to the program has a cost. For example, if homeowners sell their homes within the five years following a mortgage refinance, they must relinquish 50-100% of their proceeds to the government, according to a sliding scale.

RELATED TERMS
  1. NAHB/Wells Fargo Housing Market ...

    An index based on a monthly survey of members belonging to the ...
  2. House Price Index - HPI

    A broad measure of the movement of single-family house prices ...
  3. Sheriff's Sales

    A term used to refer to distressed public property auctions. ...
  4. Federal Housing Finance Agency ...

    A U.S. government agency created by the Housing and Economic ...
  5. Fannie Mae - Federal National Mortgage ...

    A government-sponsored enterprise (GSE) that was created in 1938 ...
  6. First-Time Home Buyer

    An individual who is purchasing a principal residence for the ...
RELATED FAQS
  1. How does the American Housing Rescue and Foreclosure Prevention Act of 2008 affect ...

    The passage of the American Housing Rescue and Foreclosure Prevention Act of 2008 at the end of July 2008 made about $15 ... Read Full Answer >>
  2. What is the difference between "closed end credit" and a "line of credit?"

    Depending on the need, an individual or business may take out a form of credit that is either open- or closed-ended. While ... Read Full Answer >>
  3. In what instances does a business use closed end credit?

    The most common types of closed-end credit used by both businesses and individuals are mortgages and auto loans. Businesses ... Read Full Answer >>
  4. What are the long-term effects of delinquent accounts?

    Delinquency occurs when borrowers fail to make payments on their loans. All loan borrowers should do their best to avoid ... Read Full Answer >>
  5. How was the American Dream impacted by the housing market collapse in 2008?

    The American Dream was seriously damaged by the housing market collapse in 2008. In many ways, the American Dream is a self-fulfilling ... Read Full Answer >>
  6. How much risk is associated with subprime mortgages?

    A large amount of risk is associated with subprime mortgages. Since the mortgages are specifically for people who do not ... Read Full Answer >>
Related Articles
  1. Home & Auto

    Why Housing Market Bubbles Pop

    Home price appreciation is not assured. Can you withstand the volatility in this market?
  2. Home & Auto

    5 Tips For Recession House Hunters

    Follow these five tips to get a leg up on rival bargain hunters.
  3. Taxes

    A Tax Primer For Homeowners

    Go beyond interest and find out how mortgage points affect your taxable income.
  4. Home & Auto

    Don't Let Foreclosed Homes Ruin Your Neighborhood

    Empty homes in your neighborhood aren't just eyesores - they can affect the value of your property.
  5. Home & Auto

    An Introduction To Buying A Condominium

    This real estate investment provides unique advantages - and challenges.
  6. Home & Auto

    Investing In Foreclosures Not A Get-Rich-Quick Venture

    Investing in this kind of real estate takes capital, time and careful planning.
  7. Home & Auto

    Uncover The Next Real Estate Hot Spot

    Real estate land speculation is a way to get in on a hot investment before a boom hits.
  8. Personal Finance

    How Will The Subprime Mess Impact You?

    The subprime collapse could mean doom and gloom for housing, equities and the overall economy.
  9. Economics

    Economic Meltdowns: Let Them Burn Or Stamp Them Out?

    Whether the Fed should intervene in market bubbles is up for debate. Learn about both sides here.
  10. Credit & Loans

    Don't Get Trapped in a Zombie Foreclosure

    Understand how foreclosures work and you can avoid the disastrous consequences of having a zombie foreclosure.

You May Also Like

Hot Definitions
  1. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  2. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  3. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  4. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  5. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
  6. Touchline

    The highest price that a buyer of a particular security is willing to pay and the lowest price at which a seller is willing ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!