It’s not just the Bush tax cuts that expire at the end of the year. The maximum lending limits at Fannie Mae, Freddie Mac and FHA were set to expire. The Build America Bond (“BAB”) program is another. They both have been “fixed”. We kicked the can down the road (again) while no one was looking.
Way back in 2008 when we were really in a financial crisis there was no private mortgage market. The banks were all in the crapper and they were not lending a dime. Without a viable mortgage market there would have been a complete collapse. The maximum lending limits of the D.C. mortgage providers were set at levels designed to support the bottom end of the housing market. In response to the crisis the HERA legislation allowed for a very significant, but temporary, increase in the statutory lending limits. Those temporary increases were supposed to be reversed as of 12/31/2010. They weren’t reversed. They were extended.
These critically important extension of federal subsidies to the mortgage market were lumped into a number of other fixes necessary to keep the government moving for another year (Sen. Byrd’s grandchildren get $197k?). The language that “fixed” the problem can be found at this site. The specific wording is at the bottom, in sections 143-146. There was no debate on this. Washington just passed the trash.
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