Economic Stimulus Deal Reached By House and Administration—Final Deal Could Jumpstart Refinance Market

January 24, 2008

House leaders and the administration reached agreement today on a roughly $145 billion economic stimulus package that would quickly send payments to poor and middle-class workers while offering businesses one-time incentives to invest in new equipment and write off tax losses. The Senate must still complete its own package, and differences will need to be negotiated by both bodies.

To address the underlying economic issue of the housing slump, administration officials agreed to expand the Federal Housing Administration's ability to insure higher-priced mortgages and to help homeowners threatened by foreclosure renegotiate their loans without sharp increases in their payments.

The package would temporarily increase the size of jumbo mortgages that can be bought by government-sponsored Fannie Mae and Freddie Mac, from $417,000 to as much as $625,500 in high-cost housing markets.

This should help increase activity in the refinance sector of the mortgage market, which will directly affect title insurance companies by increasing these transactions.

It would also allow faster tax write-offs for corporate investment and immediate tax deductions for small-business investments in plants and equipment. Businesses also would be able to take tax deductions this year on operating losses from as long as five years ago.

Under the plan, as many as 117 million people would get rebate checks. Individual income tax filers would receive up to $600, working couples would get up to $1,200, and those with children would get an additional $300 per child. Full rebates would be sent to single taxpayers who earned up to $75,000 and couples with incomes of as much as $150,000. The value of the payments would decline after that and phase out entirely at incomes of roughly $87,000 for individuals and $174,000 for joint filers.

The aim is to start sending the checks within 60 days of enactment of the stimulus package, with most recipients receiving their checks in less than 10 weeks.

There may be an effort by the Senate to increase payments to the working poor, reinstate unemployment benefit extensions and to secure funds for infrastructure projects, such as road resurfacing, that could begin pumping money into the economy months before the government can issue checks.

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North American Title Insurance Company (NATIC) is a seasoned title insurance underwriter, helping title agents to achieve their individual business goals for more than 50 years. Today, the company conducts real estate settlement services in 39 states and the District of Columbia through a network of experienced, independent agents.