Foreclosure numbers are staggering and they are likely to continue until some type of aid is available to the average homeowner who is losing their job, unable to make payments or just made a poor financial decision. The FHA and HUD actually provide some help to individuals who are facing foreclosure or who wish to avoid it.

What To Do Now

If you are at risk of foreclosure, you need to do something now. Do not wait as this is a sign of your willingness to go through with the foreclosure. Instead, invest the time in getting help.

#1: Talk to an FHA housing counselor about your situation. They may be able to point you in the right direction in terms of stopping the foreclosure process. There IS help available for many people.

#2: Talk to your lender. Today’s lenders are more willing than ever to keep you in your home by finding a solution to foreclosure. When they call, tell them what is happening and what type of help they can offer. They may allow you to skip a payment or help you to refinance the loan into a lower rate.

#3: Find out if you qualify for HOPE for Homeowners, a program designed to provide resources to individuals who wish to remain in their homes but who are having trouble refinancing or getting into a more affordable loan.

Should You Keep Your Home?

Those without income may be unable to remain in their home since no amount of mortgage can be paid. If you do have a job and you do wish to stay in your home, find out if there are any options to help you to do so. If you lose your home to foreclosure, lenders will not lend to you for years to come. With the credit market being so tight, even with good credit, you will struggle to find a lender to buy another loan, or even a rental agent who will rent to you. In other words, if you can stay in your home, do so.

Those who may be having trouble with lenders or those who are unable to find the help they need otherwise, may wish to look for help directly from FHA loan specialists. The goal you have is to get help now. Do not wait since it only takes a few months before you are too far into the foreclosure process to stop it.

There are many benefits to the stimulus bill that passed Congressed to the real estate market. One of the best benefits, according to the National Association of Realtors, which is an organization representing more than a million of the country’s real estate associates (of all types) is the benefit that some of the funds within this build are designed to help stabilize the local communities.

Why They Need Help

Like virtually everything else in the economy, the real estate market has been hard hit due to the downturn. Some blame the housing market for putting this economic downturn into play. Regardless, the failure of the markets has resulted in pain across the board. For example, so many homes have been foreclosed on in some neighborhoods that each street has one or more signs of homes for sale by banks. Some homes have simply been abandoned. They are vacant. Foreclosures and vacant homes add to the neighborhood’s increased crime rate. The problem is, some cities have had to trim back on their services and on their employees. The result is fewer police officers on the streets even though there is increasing difficulties.

Another way to look at the problem is to note what has happened to so many neighborhoods with these vacant homes in terms of property values. Property values have fallen significantly. 20, 30 or more percentage of property value has just been wiped clean. This means that those who currently own homes and wish to sell them cannot do so without taking a serious cut. Others may be forced to foreclose due to the inability to sell property.

As you can see, there is a real problem when it comes to these homes sitting on the market, unable to be sold or unwanted.

How The Bill Changes Things

One thing that the economic stimulus bill has done, is to offer cities a bit more help. The plan gives cities money to purchase these vacant properties. The city and purchase the property, clean it up and resell the property. They can also bulldoze it so that the vacant lot is less of an eyesoar in the community.

With cities being able to do this several benefits are seen. First, cities see stabilization in the real estate market. They can also see improvement in home values as these properties may not sell at a higher amount. In addition, they stop the house values from falling farther which has only made the difficulties even more difficult. Communities can finally stop the decline.

The Bill Gives More

The stimulus bill is doing a good amount to aid individuals in buying those homes, too. Now, individuals who are first time homebuyers (who have not purchased a home in the last three years) are able to get a substantial tax credit if they do so in 2009.

FHA also receives aid because now there is an increased ability to lend money since the stimulus bill has aided in creating higher loan lending limits. Overall, the benefit here is that individuals will be able to qualify to purchase a home more readily.

FHA loans are available for a growing number of people. If the stimulus bill has done anything, it is to encourage more people to buy homes. According to the National Association of Realtors, the stimulus bill could help to sell more homes. An estimated 300,000 first time homebuyers may be attracted to purchasing a home due to the tax break offered to them. Thousands more will find that funding they need through the availability of FHA loans. It is a great time to buy.

The stimulus bill, The American Recovery and Reinvestment Act passed Congress on Friday and is to be signed by President Obama on Tuesday, February 17th.  The Bill does mention the FHA, Freddie Mac and Fannie Mae, the government lending bodies. One of the things the Bill does for these organizations is to raise their lending limits. In 2008, lending limits were raised significantly to allow the FHA to step in and help more people facing foreclosure. Those levels reverted back in 2009. The Bill pushes the limits back to the 2008 level. This means more funds are available for these banks to aid those purchasing homes.

What Do New Limits Do?

There are several things that this new higher limit offers to the mortgage industry. First, by raising the limit, there is more money available to these organizations to purchase loans. This means that when Joe Smith comes to purchase a home, and would like FHA backing on that loan, he can get it because the funds are available to allow for this.

As you know, the FHA allows individuals to get a lower interest rate when borrowing money because it gives the lenders an added insurance that the loan is secure to them. If the borrower with an FHA loan fails to make payment, the property is foreclosed on, but the loan holder can file a claim with the FHA to be reimbursed some money. It works very much like an insurance policy for the lender. Because of the lessoned risk, the lender offers a lower interest rate to the borrower. In short, it aids each body involved.

There are other ways this new higher limit on Freddie Mac and Fannie Mae will. Because it does free up some of this money, more people will qualify in all likelihood for these home loans. With better qualification numbers, more homes can be purchased. People can afford to purchase a home again with the lower interest rate. In turn, more properties that have been sitting on the market or even vacant can be sold. In other words, by raising these limits, the government is aiding in reducing inventory of available housing. This will give cities back their property taxes and aids in boosting other home values throughout the area.

The overall process improves the liquidity of the mortgage market as a whole. Many economists blame at least part of the economic downturn on the failure within the housing market. By restoring some stability here, it could also help to restore some of the value in housing and the markets as a whole.

What Does It Mean To You?

As you consider the Bill and what is included in it, one thing you may want to consider is your own ability to obtain a mortgage and to purchase one of these homes. Not everyone will qualify for a home loan through this program, but far more money is available to help more people to qualify. If you have been considering purchasing a home, but where not sure if you could, or should do so, there benefits of these increased limits makes now an ideal time.

The benefits of having an FHA loan are immense and it should not be overlooked by anyone who is looking for an opportunity to buy a home. Keep in mind that you will still need to meet income and credit qualifications to obtain an FHA loan. If you have been thinking about this type of loan opportunity, take the time to talk to an FHA loan specialist to find out if you qualify for the loan.

If you are ready to purchase your FHA backed home mortgage, now may be a great time. In the recent Bill to pass Congress, the American Recovery and Reinvestment Bill, Congress has put into place a substantial benefit to individuals who purchase a home this year. Those who are ready to buy will find that this benefit is sizable and lucrative, making it an ideal time to buy.

What Do You Get

The stimulus bill gives individuals who purchase a home in 2009 a sizable tax break. The Senate’s version of the bill called for much more than actually passed, but for first time homebuyers, this new benefit is still very enticing. For those who purchase a property in 2009, a onetime $8000 tax credit will be available to them. This tax credit does not have to be repaid as similar opportunities in previous years have required. Rather, as long as you make under $75,000 as an individual or $150,000 jointly, you will qualify for this tax break.

Anyone that has not owned a home in the last three years is technically qualified as a first time homebuyer. This means that millions of people may have these funds available to them currently. This particular element in the stimulus bill costs $6.63 billion, but may be well worth it for several reasons.

#1: It gives individuals more of a benefit to purchase a home even if they thought now was not the time. For example, if you were unsure if the bottom of the market had hit, and you wanted to get the best deal available, buying in 2009 is likely to be a good opportunity to save money in the form of a tax credit.

#2: It helps to clean up some of the inventory that is sitting open on the real estate market right now. This will help to boost the property values of homes in the neighborhoods. In addition, it allows cities to get back some of their property tax dollars they have lost. Many cities throughout the country are cutting jobs and services because they do not have the property tax income they need to pay for such services. Getting people back into those homes may be particularly beneficial to the cities.

#3: Those who may have needed that extra reassurance that now is the right time to buy a home can get it. Credit standards are still tight, but with this added benefit, more people will see that now is a great time to own property.

What To Keep In Mind

One of the problems with tax breaks like this is that people often think of it as free money. It is important to note that while you do not have to pay this money back, you still have to qualify for the mortgage to obtain the house in the first place. It is highly recommended that you have some money to put down to buy the home and have a good or better credit score. With these qualifications, you may be able to obtain a home loan through FHA.

Do not overlook the benefits of FHA loans. These loans can sweeten the deal even more so by giving you an added benefit of a low interest rate on the home you buy. You will pay less tax and you will pay less in terms of interest over the lifetime of your loan.

To find out if you qualify for an FHA loan, contact an FHA loan specialist. Ask them about how this tax break can help you to save money while buying a home.

Looking for FHABook.com?  Don’t worry, you’re not in the “wrong” place.  It’s all right here.  As of December 2008, FHABook.com’s two principal writers are now full-time contributors to FHA Mortgage Center.com’s Blog as well as to our Consumer Guides, Loan Library, and all of our resouces on FHA Loans.

After being a fan of FHABook for some 2 years, our staff was happy to strike an arrangement to bring our forces together under one website.  If you’re a fan or reader from FHABook – please update your RSS feeds or blogroll mentions accordingly.  Welcome to FHAMC!

And if the new partnership isn’t enough to be excited about, this week will see the launch of our first project together with FHABook – the FHA Mortgage Center.com FHA Loan Guide.  It’s got everything a prospective home buyer could ever want to learn about using an FHA Loan.

This is just the first example of our collaborations yet to come, all in the name of keeping our readers and the general public informed about one of the most frequently-used home loan options on the market today.

President Bush has been a long standing opposing figure against the housing bill that’s currently working its way through Congress. His reasoning here is sound: there are too many piggyback conditions being added to the bill, which is often the case with any legislation today. Yet, today, he announced that he would no longer fight this bill’s passage. In other words, he has put the VETO stamp down, at least for now.

The housing bill has merit: give homeowners who are struggling to keep up with their mortgages the ability to find new loans, with lower interest rates and payments, so they can get back on their feet. These new loans would come from federal programs. The housing bill would also provide support to the struggling mortgage giants Freddie Mac and Fannie Mae. These organizations are in dire need of additional funding and a cash infusion.

President Bush’s problem with the housing bill is noteworthy. There is an estimated $3.9 billion worth of provisions that would be aimed at providing lenders with additional financial support (that is not homeowners, but lenders) which Bush did not agree with.

In a telephone conference call with reporters today, the White House’s Press Secretary Dana Perino made this statement, as quoted by the Associated Press. “We believe this is not the time for a prolonged veto fight but we are confident the President would prevail in one.” Then, added, “The positive aspects of the bill are needed now to increase confidence and stability in the housing and financial markets. While we have concerns with other aspects of the bill, it is important that the new authorities are put in place promptly. And so President Bush will accept Secretary Paulson’s recommendations to sign the bill.”

So, what does this mean to those who are struggling with the current foreclosure market? If and when the bill passes through Congress and President Bush signs it into effect, it could mean additional protections and more loans available to keep homeowners out of the financial stresses they are currently in. The housing bill is designed to pump more opportunities into the system.

For those who are currently struggling with home loan, it also is important to get help as soon as possible. Do not wait for this bill to go into effect. Instead, seek out the help of an FHA loan specialist to offer you solutions. FHA loans are also readily available to those who need a new home loan.

FHA loans are one of the most talked about today…that was until Freddie Mac and Fannie Mae started getting all of the attention. Recent share prices as evidence, the two mortgage giants are struggling and in desperate need not only of additional capital, but also more management. Freddie Mac and Fannie Mae are the nation’s top lenders, who are government-backed providers of funds for backing mortgages. Without them, the nation’s mortgage industry would wobble even worse.

The problem with these providers is that they have not had much guidance or any amount of regulation. There is new legislation working its way through Congress that will provide some relief. James B. Lockhart III has been heading this agency for some time, and throughout that, time has been calling for help. The problem, as he has said is that the two agencies are not required to hold a lot of capital, as compared to larger banks. That’s about to change…or it may that is.

The legislation provides several changes to the Federal Housing Finance Agency, which will now regulate Freddie Mac, Fannie Mae and the Federal Home Loan Banks. First, a regulator will be put in place that has the ability to raise the capital requirements. The regulator also has the ability to hold back executive pay at these companies. If the companies should become insolvent, the housing bill offers specific procedures to place the companies into receivership status. Also important is the drop in the highest level of mortgage backing that Fannie Mae and Freddie Mac can loan or guarantee to $625, 500, which is down from $729,750, which is the temporary ceiling that was put in place.

In addition to this, the legislation also offers a provision for a portion of the profits to be put into a trust fund, which is then designed to provide financing for those who qualify as low income people.

What does this mean to you, the average homeowner? Currently, it doesn’t mean a whole lot, not until it goes through Congress and gets put on the books. It should mean that more regulations would be in place to prevent the collapse of these important lending bodies in the nation.

However, for now, it is up to you to find the best loan for you, which Freddie Mac and Fannie Mae may be. FHA loans are an opportunity to get into a home loan without a lot of risk, too.

There seems to be many people, politicians and government agencies getting into the mix of fixing bad mortgages. Detroit has a new program in place to help those who are struggling to make their payments. Detroit is a city filled with problems. Large industries such as the automotive industry have moved away because of lack of profits. The city was the poorest and most unstable in the country for several years. It is no wonder a program like this would be offered to those in the city looking for a silver lining.

One program created by the Federal Department of Housing and Urban Development (HUD) will allow borrowers who have FHA loans to get help. The program allows the mortgage lender to submit an insurance claim on the mortgage. Typically, the government insures FHA loans, so lenders are less likely to face default themselves. When the borrower begins to fall behind on their mortgage payment, the lender issues an insurance claim on that loan. HUD then moves the loan to a company for servicing and works directly with the home owner to restructure the loan to make it more affordable. This initiative went in place just this month. It is designed only for those whose loans are in arrears, not those that have failed.

Is this a good opportunity for investment? From the prospect of the home owner, it can be. I say “can” because it is not always a good option for all borrowers. The problem is, if the home owner simply cannot afford the loan payments, even at the refinanced rate, it won’t help them. Yet, for many of these people, the problem is that their rates have adjusted and that is what has caused the problem. In these situations, this new FHA program may be just what these individuals need.

Why is the city doing this? There is evidence that any one city will be hurt by just one foreclosure within a neighborhood. One foreclosure may significantly cause home property values to fall significantly. Therefore, it is in the best interest of any city to consider programs that offer this amount of support.

FHA loans are helpful here and you do not have to be in default to get help. If you are struggling to make your payments, contact an FHA representative as soon as possible to get help. What’s more, remember that programs like this are showing up around the country, in many of the cities hurt the most by foreclosures.

I know that in recent weeks I’ve made some harsh comments about Congress being involved in trying to fix the housing market with the bill they currently have in place. The fact is, the FHA programs are outstanding and they provide help to those that can afford to stay in their homes. I stand by the fact that many homeowners who are in trouble could potentially get help from the FHA currently. In addition, should the FHA take on these new responsibilities to help those who are struggling through this bill, chances are good it is a good move for them.

Yet, what is not okay is that Congress lawmakers and politicians of the worst kind (you know, those who are really just looking to move closers to the ballot box with this vote) are getting involved. That does not bode well with me.

Back to the point…though.

If the housing bill does go through, will it rescue homeowners who are in trouble for losing their home? It could, but it is not a for sure method of getting out of the financial difficulties you are in. For example, if you cannot afford the house payment you are making now, what is to say that you can afford it in the coming months?

Essentially, distressed borrowers would be able to get refinancing from their lenders who agree to work with them with these loans. The lenders are more encouraged to do so because these loans will be federally backed with taxpayer money. They will refinance into better termed 30-year mortgages if they are in their primary home. Lenders will need to agree to cut the loan balance to about 85 percent in order for the loan to be backed.

Is this the right opportunity for homeowners, then, who are struggling?

If you are worried about your current loan, get into an FHA loan right now. If you have an upside down mortgage, try working with your lender to revalue the loan. Some are willing to avoid the cost of foreclosure. Even if the bill passes both the Senate and the House, chances are good it will not stand up to the White House Veto. In addition, perhaps it is not the right solution.

Regardless of this, if you are unable to make your current home loan payments, there is risk that you will not be able to make them later, too. This program can only help those that can afford the loans, even with FHA backing.

A few weeks ago, we talked about Congress, the Bush Administration and the FHA and a bill that was being debated. Perhaps it is time for an update on where the legislation stands.

Congress believes it has the right, and the obligation, to pass laws that would allow and even require that some $300 billion worth of troubled loans would be turned over to the FHA to manage. There is little doubt that there are risks for everyone involved in such a turnover. Nevertheless, as much as people are talking about the risks this would place on consumers, the government and plenty of other people, there has been movement within Congress regarding the process.

The bill passed throughout the House. It is now on the floor of the Senate and being debated. The bill has been expanded to now include some 1.5 million loans; most of these loans are subprime, high-risk home loans.

While the FHA is an outstanding organization and provides a lifeline to those that need it, the debate centers around one fact: should Congress step in and force the FHA to take these substantially risky loans at the taxpayer’s expense. More so, just a few weeks back, FHA announced that last year, the 2007 fiscal year, say a loss of some $4.6 billion dollars. That is the largest and most severe drop the government agency has ever seen. Yet, more risk is in order here through even more loans that are high risk?

As with everything in Congress, the Senate did make some changes to the bill. They added what is being called a modernization. This will provide the FHA with the ability to lower the amount of a required down payment by the potential homeowner while still allowing the agency to nearly double the loan limits in place. The problem I see here is that this may put even more risk on the heads of taxpayers. Tens of billions of dollars worth of risky loans could be on the taxpayer’s head. Is that the right route to take?

There is a lot of speculation as to why the FHA struggled last year. Yet, looking forward, the goal of this agency is to provide a financially sound start for those who need it. In addition to this, you have to wonder if this will help to pull the country out of its housing situation. Can one agency be called on to do so much?

Another worrisome area of the Senate’s proposal is the fact that the FHA will be able to take loans from private banks that are funding them. The problem is that these are the highest risk subprime loans, which puts additional risk on the agency.

According to Brian Montgomery who is the current FHA commissioner, the bill would strap the agency considerably. After talking about the losses from last year, he noted that the FHA would be further in the red should the bill pass Congress and be signed into law. In fact, it is not just speculation. Many of the lenders who have funded these high-risk loans are now saying that they will take the “bailout” and hand over the loans to the FHA to manage.

Reports show that people are looking for answers to their home loan needs. For many people, FHA loans are the best type of loan to fund your home, and I highly recommend that anyone that may be struggling or otherwise looking for a good deal to contact FHA lenders to find out what solutions are available to them. There is no doubt this agency has every ability to help many.