Monday, July 28, 2008

New Help for Homeowners, Congress Passes Bill for Mortgage Relief

Congress passes a bill to provide mortgage relief to prevent foreclosures. The bill focuses on helping help to struggling homeowners and stabilize a troubled housing market. This program will help debt strapped homeowners get more affordable mortgages .

The federal government wants to prevent foreclosures and will be offering FHA insured loans to homeowners to refinance their debt if certain conditions are met.
  1. Banks would have to agree to take a large loss on existing loans in exchange for avoiding often costly foreclosure.
  2. Home owners would have to prove that they will be able to afford these new mortgages.
There are too many factors at hand. Banks may decide not to participate and foreclose on homes if it leaves them in a positive position. Forgiven debt be considered income and taxable by the IRS. More details will be have to be given to determine who this will actually help.

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