Foreclosure Prevention Act of 2008


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.

BREAKING DOWN '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.

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  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 >>

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