The mortgage bailout plan is a bill pledging over $700 billion to the ailing financial markets. Officially called the Emergency Economic Stabilization Act of 2008, the plan was approved by the U.S. Senate on October 1 and the House of Representatives on October 3.MarketWatch: House Readies for Second Bailout Vote Friday (October 3, 2008)

In an effort to reduce the amount of foreclosures, the Obama Administration announced that it will be expanding foreclosure prevention laws. The modification will allow second-lien mortgages to be covered by the foreclosure prevention program. The announcement was made on April 28, 2009.CNNMoney: Obama expands foreclosure fix (April 28, 2009)

House Speaker Nancy Pelosi announced that a deal had been reached on the proposed $700 bailout of the ailing financial markets, just after midnight EST on September 28, 2008.Breitbart: Deal reached on financial markets bailout (September 28, 2008) Pelosi said Democrats and Republicans in Congress had reached an informal agreement that would soon be made official.Breitbart: Deal reached on financial markets bailout (September 28, 2008)

In its basic outline, the plan calls for the government to buy the worst mortgage-related assets, known as "toxic debt," while raising the U.S. national debt limit and calling a temporary halt to the practice of short selling on certain financial stocks.Los Angeles Times: Economic bailout plan ... (September 20, 2008) Both Democratic and Republican lawmakers had criticized the original plan, as proposed by the Bush administration, in its scale and lack of safeguards for homeowners at risk of foreclosure.Forbes: Your Guide To The Bailout Debate (September 24, 2008) Forbes: Your Guide To The Bailout Debate (September 24, 2008)

On September 30, President Bush urged members of Congress and the general public to support the bailout plan and warned that savings accounts, personal retirement accounts and pension funds could be effected if action was not taken soon.Forbes.com: Can Bush Get His Bailout Done? (September 30, 2008)

The result was a bill called the "Emergency Economic Stabilization Act" (2008).CNN: Rescue bill revealed (September 28, 2008) The deal includes a measure that makes the government a stakeholder in companies they bailout, allowing recovery of taxpayer money if those companies grow in the future. The bill also recommended limits on executive compensation.Market Watch: Bailout bill unveiled, heads to House (September 28, 2008)

1. Move mortgage-related debt from U.S. banks and onto the U.S. government
2. Increase the U.S. national debt limit from $10.615 trillion to $11.315 trillion
3. Treasury department will hire asset managersWashington Post: Congress gets $700 billion financial bailout plan (September 20, 2008)
4. Purchases would include residential and commercial mortgages and related instruments which originated or were issued before September 17, 2008Washington Post: Congress gets $700 billion financial bailout plan (September 20, 2008)
5. Authority to purchase bad debts ends in two years; authority to hold the assets continues indefinitelyWashington Post: Congress gets $700 billion financial bailout plan (September 20, 2008)
6. Short selling of 799 financial stocks stopped for at least 30 daysLos Angeles Times: Economic bailout plan ... (September 20, 2008)
7. Investment banks to become bank holding companies, subject to tighter regulation LA Times: Fed jumps in for Wall St. again (September 22, 2008)
8. Hedge funds not eligibleWashington Post: Congress gets $700 billion financial bailout plan (September 20, 2008)

Initial steps in the plan developed by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke include a $50 billion program to stabilize money market mutual funds, insuring up to $2 trillion of those funds. The Fed will engage in lending and purchases practices up to $300 billion to prop up Fannie Mae and Freddie Mac. Los Angeles Times: Economic bailout plan takes shape (September 20, 2008)

Members of Congress had some objections to the plan. Some Republicans were concerned about the initial price tag which will increase the national debt and potentially burden generations of taxpayers.Los Angeles Times: Economic bailout plan takes shape (September 20, 2008) Some Democrats were concerned that help is being offered to financial companies that bet on the foreclosures but not the people who lost their homes, and that no additional safeguards or oversight had been proposed.Los Angeles Times: Economic bailout plan takes shape (September 20, 2008)

Major revisions added in the Senate's version of the bill include $100 billion in tax cuts for businesses and the middle class, and a boost in the level of federal insurance for bank deposits from $100,000 to $250,000. Los Angeles Times: Senate approves bailout after revisions, 74-25 (October 2, 2008)