Housing Rescue Bill for Homowners Facing Foreclosures

Foreclosure, Housing Bill, Senate

How can the pending Housing Rescue Bill help you if you are facing foreclosure? The House on Wednesday passed a 300 billion housing rescue bill. President Bush withdrew his threat to veto the bill that can potentially help thousands of at-risk borrowers to refinance their old mortgages into a new low-cost fixed FHA loan.

There are an estimated 400,000 borrowers with $68 billion in loans that may benefit from the program.

Who Qualifies for the Program?

To qualify, borrowers must:

Have lived in thier homes and have loans issued between January 2005 and June 2007.

Must be spending at least 40% of their gross monthly income on all household debt.

Prove they can't continue to pay for their existing mortgage.

Must retire any debt such as home equity loans or lines of credit on their home.

Total debt cannot exceed 95% of the home's appraised value.

A voluntary Program

This is a voluntary program, so lenders may be very cautious as to who will be given a rework. The bill requires lenders to write down the value of the loan to 90%. This is helpful in areas where prices have dropped in value. If you originally had a $200,000 home, the refinanced loan will be based on $180,000 at a considerably lower rate.

What is Will Cost the Borrower?

Borrowers are responsible for paying an insurance premium to the FHA guaranteeing the loan, which will be 1.5% of the principal annually.

Borrowers will also share any profits from future home-price appreciation with the FHA. To do that, they'll pay a "3% exit fee" of the mortgage principal to the FHA when they resell or refinance.

Borrowers will agree to pay the FHA 100% of any profits they realize from higher home prices if they sell or refinance within a year. So if the original loan principal is $200,000 and the home sells for $250,000, the borrower will owe the FHA $50,000, minus costs.

What if You Do Not Qualify?

If you feel you do not qualify for the program, still call your lender and inquire about the possibility of a rework on your loan. If you are still having problems, contact us today and speak with me at (704) 559-5988 X 5. As a licensed loan officer and contract loss mitigation specialist with lenders who fund loans in NC, I may be able to assist you with some options to help you if you are facing foreclosure in the Charlotte North Carolina area.

http://www.charlotterealestateforeclosures.com/004009