Bill Approved to Help Stop Mortgage Foreclosure

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Stop Foreclosure Florida with FHA help Are you struggling with a possible foreclosure looming overhead? Know someone who’s in this situation and needs foreclosure help?

Looks like Washington D.C. is trying to help.

The House of Representatives has approved a plan (named H.R. 1852) that will expand federal backing of residential mortgages to help those homeowners that are struggling with and want to avoid foreclosure.

Was it unanimous?

Well, not really, but it was pretty overwhelming. The bill went through with a vote of 348-72.

What does this FHA foreclosure bill do?

The bill is directed toward the Federal Housing Administration, a government agency that insures mortgages for low income and middle income borrowers. It now allows the Federal Housing Administration to back refinanced loans for those borrowers that have been delinquent on payments. The reason why many of these people have been delinquent is because their mortgages have been moving to massively higher levels from the “teaser” rates that were very low. These are known as Adjustable Rate Mortgages (ARM). This is why it pays to do your due diligence and not just jump into a mortgage because it sounds good! Always learn about what you’re getting into… and work with people that have YOUR best interest in mind – not just to pad their own wallets.

How many people can be helped by this?

Brian Montgomery, who is the Housing and Urban Development assistant secretary and head of the FHA, is very optimistic that this legislation can rally help the more than 200,000 people that have loans which are excluded from federal backing and help stop home foreclosure. “This is a historic day for FHA,” said Mr. Montgomery.

Has Congress done anything else to help the current mortgage situation?

This is the first stand-alone bill that has been passed in order to alleviate the mortgage-market situation of the summer, that has produced so many foreclosures and mortgage defaults around the United States. Recently, the Senate has approved $200 million dollars of aid to nonprofit groups that focus on giving counseling to homeowners that are facing foreclosure.

How is the current foreclosure situation?

RealtyTrac Inc. has said that the number of foreclosure filings has more than doubled from August 2006. That’s a huge jump! There’s also going to be an estimated 2 million to 2.5 million of adjustable rate mortgages (ARMs) that are scheduled to “reset” this year. These initial “teaser” rates are only in effect for the first two to three years and then they jump to higher rates that can it make it very hard to keep up with payments.

Michael Emilio

Real Estate and Small Business Blog