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.

This entry was posted on Sunday, August 17th, 2008 at 12:58 pm and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.