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How do I stop foreclosure on my house? The biggest question of 2008. With an expected 2.5 million foreclosures nationwide this year this is clearly the question many homeowners are facing. Is it the homeowners fault? Are they a victim of predatory lending? We want your feedback and comments please add them to this article.
Mortgage News Weekly has been in the mortgage industry for over 12 years providing marketing, consulting and research for mortgage lenders. Market conditions started to deteriote badly in mid 2007. In 2006 and early 2007 you could approve a 500 credit score borrower with more collections than you could count on your fingers at 100% or worst case 95% LTV (Loan Amount compared to the Value of your Home). New homebuyers were mostly given adjustable rate mortgages or 2 / 28 ARMs. A mortgage loan that is fixed for 2 years then adjust based on the current rates. This type of loan is made to give the borrower 2 years to improve their financial situation and refinance before the 2 years is up and lock in a fixed rate. This may of been the intention of some hard working ethical lenders or were they setting up these borrowers for failure? Most of the borrowers placed in this type of mortgage do not fix their credit issues in two years and their income does not change for the better. They are usually in the same situation 2 years later. So what happens is a higher payment hits them over the head and they are now faced with budget issues, late payments, credit issues and possibly foreclosure. The government is likely to pass a bill in the House and Senate to aid in this crisis. A variety of bills were introduced in the House and Senate in 2007 and 2008 to deal with the ongoing housing/mortgage crisis. The main bill that emerged was H.3221, the Foreclosure Prevention Act of 2008. The main provision of the bill would create a program offering lenders a federal guarantee on renegotiated mortgages with borrowers whose houses are worth substantially less than their mortgage is worth (the homeowners most likely to abandon their mortgages). The bill would also offer a tax credit for new homebuyers purchasing unoccupied houses, provide funding for loan counseling, raise the upper limit on loans Frannie Mae and Freddie Mac can purchase from urban areas, provide $11 billion in funding to local government to purchase, refurbish and resell abandoned properties and authorize state governments to issue an additional $4 billion in bonds to purchase low-income housing units. President Bush just dropped his oppostion to this bill this week. Is this enough to help America and the American Economy? Post your response and thoughts! Advertisement | Stop Foreclosure with IamMaxed.com |
