How To Stop Foreclosure & The New Housing Rescue Law
by: AlfredSant |
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In July, a program to help many homeowners to avoid Foreclosure and stay in their homes was passed by Congress and signed by President George W. Bush. In the last couple of weeks I have received tons of e-mails from my e-newsletter subscribers concerning this new program. They want to know how all this is going to help them.
Most homeowners have not idea how this new program is suppose to help them to avoid foreclosure, if in fact is going to do that, and if this financial crisis will affect the Rescue Program. They want to know who may or may not qualify, but mostly they want to know, if they do qualify for help, if it would come with any strings attach? Will be anything in the small prints that they should know or be aware of?
In short, this Bill was created to offer relief to the stressed housing market that we are facing right now and help homeowners to avoid foreclosure; But the fact is that the Bill offered direct relief to the mortgage giants Fannie Mae and Freddie Mac (of course that was before those giants had to be bailout by the Government), and in turn that would provide indirect assistance to the homeowners facing foreclosure.
The answer is yes to both questions. The homeowners who get to qualify and pass the vigorous scrutiny, and finally qualify for a FHA backed home Mortgage Loan ,in order to avoid foerclosure there are a lot of things that you need to be aware of, and you better read well because, as usual, it is very likely that you will not be explained with details all the strings that come attach along with this Rescue Law. And this financial crisis will indeed affect the Housing Bill.
Homeowners, in many cases will be better off if they hold on to their homes for as long as they could, then letting it go to foreclosure, rent a house or apartment, and then when the home prices begin to go back up, start fresh and buy a new home with a better mortgage. To start; before homeowners can get a FHA backed mortgages, they have first to pay back any other debt, such a home equity loan or line of credit they may have in their property, and they will not be able to take another home equity loan for at least five years.
For the Lenders this will be a voluntary program, so Banks holding the original mortgage have to agree to rewrite a given mortgage loan before things can get started. The bill requires lenders to make major compromises, writing down the value of the loan to about 90% of the actual real value of the property. In areas with high foreclosure rates where property prices have plummeted by as much as 45%, that will mean a extensive loss for the bank, but on the other than it may well be their best choice.
With the Financial crisis, which this Country is facing at this moment, the hight rate of foreclosure and the necessity of cash that most Banks actually have, it will not be a big problem for the banks to accept 80% or 90% of the current apprised value of the property, but there are many other issues engaged in this matter.
The lenders will not sign off on a workout unless they think that they will lose less money on that than they would by allowing a home to go through the costly foreclosure process. In this regard there are many factor that need to be weighted in like; Will Fanny maid or Freddy Mac have the cash available, or if potential new buyer will find credit, if they decide to foreclose and then sell the property in the market.
If you wonder; will this have any cost to me? The answer is yes, there is a prearranged up front cash cost for homeowners to bear. And what is the catch? In fact the refinanced loans do come with many strings attached, so the borrowers who are facing foreclosure must understand what they are getting into, since it is not as simple as the Government wants us to believe. In my website I explain everything you need to know in details as well as what you should do, and if you will or will not qualify for this help.
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About the Author
If You Want To Learn More About This Topic And For Tips And Proven Techniques And Strategies On How To Avoid Foreclosure And Stay In Your Home For Over A Year And A Half Without Making Mortgages Payments At All Visit My Website: www.YouStayHome.com
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