Housing Bill Expands FHA's Subprime Relief.

Washington-Now that President George Bush has signed the housing bill, the hard work of implementing its provisions begins in the midst of a weak market and tight credit conditions.

Treasury secretary Henry Paulson said last week that he expects foreclosures and inventories of unsold homes will remain elevated into next year and home prices are likely to decline further on a nationwide basis.

"I believe we can move through the bulk of the correction in months rather than years," he told financial services executives and lobbyists at the Exchequer Club here.

But to turn the corner, the Treasury secretary says the availability of affordable mortgage financing must be increased.

Under the housing bill, provisions to modernize the Federal Housing Administration mortgage insurance programs will provide borrowers with greater access to FHA-insured mortgages, he said.

The secretary also noted that a special FHA refinancing program in the bill will help some borrowers with "underwater" mortgages.

The secretary and Bush administration officials resisted inclusion of this FHA foreclosure rescue program in the bill. But Department of Housing and Urban Development officials assured Senate Banking Committee chairman Christopher Dodd, D-Conn., last week that the new program will be up by Oct. 1.