From AP.
The biggest winners in the economic rescue plan that passed the U.S. Congress on Thursday and awaits President Bush's signature are middle- to upper-income Americans who can refinance their jumbo home loans at cheaper rates.
The stimulus package temporarily raises the maximum size of mortgages that Fannie Mae and Freddie Mac can purchase and market as securities from $417,000 to as high as $729,750 in expensive parts of the country like New York City and California.
It makes a similar change for loans backed by the Federal Housing Administration, which insures loans to borrowers with weak credit.
Right now, borrowers in expensive areas are "really stuck between a rock and a hard place," says Mark Vitner, senior economist with Wachovia Corp. Raising the caps, he says, will result in a refinancing boom for those properties.
"We're more likely to see an immediate improvement at the upper end than we are at the lower end" of the housing market, he says.
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