A lifeline is on the way for thousands of Americans in danger of losing their homes. The President signed off on a giant rescue plan that will help the housing market in its worst slump since the depression. Sean and Maggie Carolan look like a mortgage broker’s dream.- perfect credit, good incomes, low debt, but when it came time to lock in a loan, their broker hiked the rate, saying their new home was in a declining market.

Sean Carolan, home buyer: “I was offended because I said, I don’t even know what a declining market is, what does that mean? And he said, well, the whole country is a declining market.”

Which is why, despite a previous veto threat, President Bush signed a massive bailout plan. The housing bill aims to relieve the stress in the credit markets and to provide mortgage relief for 400,000 struggling homeowners by allowing them to refinance into cheaper loans. The new law also provides a safety net for the mortgage companies that keep the housing market afloat. Fannie Mae and Freddie Mac carry 5-trillion dollars of debt. When they started to crack, alarm bells rang.

Stacey Bradford, smartmoney.com: “They either own or guarantee nearly half of all the mortgages in the country.”

Their health is basically essential to the recovery of the housing market, and that recovery is still a long way off. The latest reading showed the steepest drop ever in home prices. Foreclosure rates are up more than 100% since last year. While the President signed the bill without fanfare or cameras, lawmakers call it the most significant housing legislation in a generation.