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Foreclosure Relief Bill Going to Bush |
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07-29-08
The much awaited housing rescue bill has passed both the House and Congress and is now on its way to the White House for Bush's final approval. This is a bill Bush and his republican cohorts had always threatened to veto until just last week when Bush finally came out admin pressure to approval the bill despite his obvious objections.
This bill is expected to become law and the FHA refinance product behind it is expected to become available October 1st of 2008. While the FHA Help Now refinance program is voluntary for your bank to allow you to participate it is expected to be less costly then pursuing foreclosure against you. As a result the hope is that the bank will choose the least expensive option to satisfy your account and mortgage and in this case the hope is they will allow you to enter into the FHA Help Now program.
The program would work by requiring the lenders write down the loan to 90% of the current appraised value of the home. This would effectively relieve any upside down pressure current homeowners may have and substantially reduce monthly payments. But since this is voluntary for the banks they will proceed with what is cheaper either letting you enter this program or foreclosure. It is well possible on some homes that foreclosure would be cheaper for the bank and then that would be avenue they would proceed along. However if they do agree the new FHA approved lender would now purchase your loan at 90% the value of the property from your current bank. This would be an FHA approved bank not the FHA its self since they do not hold mortgages they just issue the insurance and guidelines.
Some of the basic qualifications include: - The home must be your primary residence no exceptions and the loan must have been taken out between Jan 2005 to June 2007.
- Your mortgage debt ratio must be higher then 31%. In other words you must currently be spending more then 31% of your income on the mortgage payment.
- Proof that you can not afford the current mortgage payment must be submitted.
- Proof that you can afford the new mortgage payment at 90% the value of your home must be submitted.
- Any other debt on the home must be paid off such as home equity lines.
As always we encourage everyone having any trouble at all to no wait for this program since there are still items that can throw it off track from being a viable alternative and even once it does become public your bank can still say no to it since the current bill includes voluntary provisions for your current bank to let you into the program. Discuss the news
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