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.

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 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

    What is an Alt-A Mortgage?

    Called "liar loans" for their low documentation requirements, Alt-A mortgages were hot until the subprime crisis. Now Wall Street wants to bring them back.
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. Do FHA loans require escrow accounts?

    Federal Housing Administration (FHA) loans require escrow accounts for property taxes, homeowners insurance and mortgage ... Read Full Answer >>
  3. Do FHA loans have prepayment penalties?

    Unlike subprime mortgages issued by some conventional commercial lenders, Federal Housing Administration (FHA) loans do not ... Read Full Answer >>
  4. Can FHA loans be refinanced?

    Federal Housing Administration (FHA) loans can be refinanced in several ways. According to the U.S. Department of Housing ... Read Full Answer >>
  5. Can FHA loans be used for investment property?

    Federal Housing Administration (FHA) loans were created to promote homeownership. These loans have lower down payment requirements ... Read Full Answer >>
  6. Do FHA loans have private mortgage insurance (PMI)?

    he When you make a down payment from 3 to 20% of the value of your home and take out a Federal Housing Administration (FHA) ... Read Full Answer >>
Hot Definitions
  1. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  2. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  3. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  4. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  5. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
Trading Center