The economic stimulus plan recently announced Congress and the White House includes provisions that specifically address the mortgage crisis. It aims to make getting a mortgage easier and cheaper in high-cost markets, to facilitate refinancing and to prevent foreclosures.

The package proposes lifting the dollar amount of loans that are eligible for purchase by Freddie Mac and Fannie Mae which currently guarantee a secondary market for loans of less than $417,000. The stimulus package proposes raising that cap to $625,000 for twelve months in order to make it easier for buyers to get or refinance mortgages - especially in high-cost locales like Manhattan and South Florida.

The National Association of Realtors recently projected that a higher loan limit, which the organization and other industry trade groups have been lobbying for, would boost home sales by nearly 350,000 a year. It would also reduce the average period of time a home sits on the market by a month and a half, and lift prices by two or three percentage points.

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