05-23-08

The housing bill that would help homeowners in trouble by writing down their mortgages and refinancing them into a fixed rate FHA mortgage now has a target date of October 1st. The bill still must pass congress and it is expected to do so with now some republicans supporting the measure after many compromises where negotiated. The White House had threated to veto the bill prior to the new revisions – official support for the new housing bill has not come yet from Bush.

The bill aims at making a difference for the 1.5 million subprime borrowers whose loans will be adjusting this year. With such a late start date it is feared that this mortgage legislation might be too late for some and many are expected to have their homes foreclosed on before the start date.

Vice President of Realty Trac publishes foreclosure data and he is quoted as saying: "The people the bill will most likely help are those resetting in the third quarter and beyond." Sharga said. "The people who reset in the first quarter will almost certainly be beyond help.”

However in the current environment most banks are not acting as quickly as they did in the past to have homes foreclosed on, mainly do to the extensive loses to the bank for all of the legal work and loss of resale value for the home. As a result most banks are not willing to create workout packages or refinance the loan in house to avoid these costs.

All homeowners that are in trouble should first contact their bank and try to get the loan modified or refinanced in house and if that fails try the hope now hotline they will submit a modification request directly to your lender for review. The other reason homeowners should act now and not wait for this bill is that it will be voluntary by the banks to enroll in. IF a bank chooses not to be a part of this housing bill the homeowners under that bank will not benefit.

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