Survey: FHA Refis Will Cut Foreclosures

Nearly 60% of 278 economists expect a special Federal Housing Administration refinancing program to reduce mortgage foreclosures, according to a survey by the National Association of Business Economists. But "only 34% feel it will help hasten the housing recovery and only 31% say it will help stabilize housing prices," said the NABE, which polled its members from July 25 to Aug. 11. President Bush signed the housing legislation that recreated the FHA refinancing program on July 30. The housing bill also expanded Fannie Mae's and Freddie Mac's lines of credit at the U.S. Treasury and granted the Treasury secretary the authority to purchase stock in the two government-sponsored enterprises. "With regard to possible Treasury support of the GSEs, fully 75% agree that these institutions are 'too important to fail,' and only 20% felt that such assistance would necessarily amount to nationalization," the NABE said.