Emergency Economic Stabilization Act of 2008
The Emergency Economic Stabilization Act (EESA) was enacted to allow the Federal Government, through the Secretary of the Treasury, to purchase mortgage loans, mortgage-backed securities, and other assets in danger of foreclosure. The purpose was to mitigate problems arising from a growing financial crisis by restoring liquidity to credit markets. The EESA had a $700 billion limit and established a special oversight board to work with the Treasury Department to avoid the issues in the future.
In March 2009, to further extend protection to consumers, Congress enacted the Home Affordable Refinance Program (HARP). The goal was to help homeowners who were current in their mortgage payments, but could not refinance because their mortgages were more than the current value of their home due to the US housing market correction.
Congress then added Home Affordable Modification Program (HAMP), a program to help homeowners who were not current in their mortgage payments. The program had a limited timeframe, with applications for assistance being accepted only through December 31, 2016. An extension of the same program was the Hardest Hit Fund (HHF), which was designed to continue foreclosure prevention and neighborhood stabilization efforts had been funded through the end of 2020.
Technically, the EESA is not the same type of entitlement program as Medicare, Social Security, or the Farm Act, in that it was not an entitlement program, but rather a bailout program. Had the banking system failed, there would have been a catastrophic impact on individual savings, and access to credit.
This program can be considered a modern-day reflection of the government’s commitment to protecting Americans from financial ruin, even when it isn’t legally promised. While the method was contested across political parties, support for the Act was unilaterally endorsed, as noted in a joint statement by then-Senators John McCain and Barack Obama.
”…No matter how this began, we all have a responsibility to work through it and restore confidence in our economy. The jobs, savings, and prosperity of the American people are at stake… the effort to protect the American economy must not fail…This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe.”
Richard has been conducting research on Retirement Insurance for more than 20 years. He received his Master of Accountancy (MAcc) in 1998 and is a licensed Certified Public Accountant (CPA). In the aftermath of the 2008 financial crisis, Richard found himself surrounded by friends and family who were concerned about their retirement and how they would be able to afford a comfortable life during their golden years.