How To Avoid Foreclosure & The New Housing Rescue Bill

by AlfredSant

In July of this year, President Bush signed a new program that is supposed to help many homeowners to avoid foreclosure and stay in their homes. In the last few weeks I have received many e-mails from subscribers asking me about this new Help Release Program. They want to know if this program is going to help them and how will it work?

Homeowners want to know how this program is going to work for them to avoid foreclosure and if the financial crisis that Wall Street is facing now is going to affect this program. They want to know who will qualify, how to get help, and if the help will come with restrictions or any kind of strings?

The New Housing Rescue Law is expected to ease the struggling housing market and help homeowners to avoid foreclosure; but the reality is that this Bill is intended to bolster the Mortgage Finance giants Fannie Mae and Freddie Mac (this was developed before they had to be bail out by the Government) and not exactly to the majority of struggling homeowners in a direct way.

If you qualify, and pass the vigorous scrutiny, and finally get approve for a FHA backed home Mortgage loan in order to avoid foerclosure, there are a lot of strings that you better be aware of, and you better pay attention, because, as always, you are very likely to left out of the loop with the details. There are many, many strings attach along this Bill.

Is important that you understand that in many cases homeowners will be better off if they hold on to their homes for as long as the could, then letting the Bank Foreclose the property, rent for a year or two, and then when the home prices stop falling, star fresh and buy a new home. Going back to the Bill; before homeowners can get FHA backed mortgage loans; they must first pay back any other debt on the home, such as a home equity loan or line of credit. Borrowers will not be allowed to take out another home equity loan for a period of at least five years.

This is a voluntary program, so lenders holding the original mortgage have to agree to rework a given loan before things can get started. The bill requires lenders to make major concessions, writing down the value of the loan to 90% of the current value of the house. In areas with high foreclosure rates where prices have plummeted by as much as 40%, that will mean a substantial loss for the lender.

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.

There is a predetermined up front cash cost for borrowers to bear, and In fact the refinanced mortgages loans do come with many strings attach, so the homeowners who are facing foreclosure must be aware of what they are getting into, since it is not as simple as we may be bound 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 Rescue Law Bill.

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 House For Over A Year And A Half Without Making Any Monthly Mortgage Payments Visit My Website: www.YouStayHome.com

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