By CQ Staff

President Bush on Wednesday morning signed into law a massive housing finance package intended to stabilize financial markets and the battered housing sector.

The Senate cleared the legislation (HR 3221) by 72-13 on Saturday, July 26, ending months of back and forth between the chambers and the two parties.

The package marks the most robust congressional response, so far, to ongoing problems in the housing market, where foreclosures continue to rise and rattle Wall Street.

The compromise legislation includes provisions to help borrowers get out from under loans they cannot afford, offers a one-time tax credit of up to $7,500 to first-time home buyers and throws a lifeline to struggling mortgage finance giants Fannie Mae and Freddie Mac.

The House sent the legislation to the White House on Tuesday. Bush had been expected to sign the bill quickly, in part because it includes two White House priorities: A backstop for Fannie and Freddie and creation of a strong new federal regulator for the two companies that will be empowered to set capital levels and limits on their mortgage portfolios.

Treasury Secretary Henry M. Paulson Jr. worked closely with key lawmakers to craft the final compromise, and repeatedly urged Congress to expedite action in order to stabilize the turbulent financial markets.

Senate Banking Chairman Christopher J. Dodd , D-Conn., met Tuesday with Paulson, Federal Reserve Board Chairman Ben S. Bernanke, FDIC Chairman Sheila Bair and HUD Secretary Steven Preston. The senator said the four assured him they would be able to implement by its Oct. 1 effective date the program in the bill to help borrowers at risk of losing their homes to refinance their mortgages.