Charlotte Real Estate, Foreclosures, Short Sales

Okay, it seems as though Capitol Hill has made a breakthrough and the leaders in Washington may have reached a deal on the Wall Street Bailout.  The plan calls for the Treasury Department to buy deeply distressed mortgage-backed securities and other bad debts held by banks and other investors.  This will help lenders keep credit lines open, staving off a slow economy.  The government would later try to sell the discounted loan packages at the best possible price.  There is an allocation of funds to encourage holders of distressed mortgage-back securities to keep the securities and buy government insurance to cover defaults.  Legislation would place limits on severance packages for executives of companies that are benefiting from the rescue plan.  Also, the government would receive stock warrants in return for the bailout relief, giving taxpayers a chance to share in financial companies' future profits.

How the Bailout May Help Homeowners

It seems as though all roads may be leading to a temporary halt in foreclosures for the bad debt purchased by the government during this bailout.  When the government stepped in for Indy Mac, there was a halt in foreclosures due to the review of portfolios that had to be done.  Foreclosures are extremely expensive and a huge financial hardship for homeowners. IndyMac had 742,000 mortgages in its portfolio, 60,000 of which were 60 days delinquent or at some stage of foreclosure. One of the first actions the FDIC took after stepping in to pick up IndyMac's pieces was to declare an immediate halt to all foreclosure actions, pending a portfoliowide review.  We may see the same actions being done for struggling homeowners across the country.  The lowering of monthly payments will probably be in bulk.  According to the Seattle Times, After an initial review of the 60,000 late borrowers in the IndyMac portfolio, FDIC deemed roughly 40,000 customers eligible for the modification program.  Modification terms include rate reductions, the lengthening of payback terms, rescheduling unpaid principal and interest, rate caps, and other techniques.