Foreclosure Relief Bills for Home Mortgages

Home mortgage solutions for home buyers and refinancing for home owners

President Bush recently signed a foreclosure relief bill to help how owners in trouble on their home mortgages. The federal action installs a government-backed mortgage guarantee to some homeowners in danger of sub-prime loan foreclosures. Adding fuel to the fire is the latest reports on low home sales and increased foreclosures or homes declared in default.

As part of the government response, mortgage companies must agree to reduce the value of their loans in danger of default and, if the government agrees to guarantee any defaulted reduced-value mortgages, the FHA will purchase those mortgages. The government housing bailout may expand to cover over $250 billion of these refinanced home loans.

The bill also addresses the problems cities are experiencing swaths of homes in foreclosure by providing almost $4 billion in grants. These grants would be used by local communities to purchase and/or maintain foreclosed real estate. Some cities are currently spending millions to mow lawns and patrol empty neighborhoods to reduce crime and stop the erosion of property values due to vandalism and theft.

The bill also extends a repayable $7,500 tax credit to some first-time homeowners if they purchase a foreclosed home as their primary residence.

The bill  increases the size of home loans in high-cost areas to $625,000 that Fannie Mae and Freddie Mac can buy and that the FHA can insure, helping hard-hit markets in New York, Florida and California. The current level was set without indexing for market changes and at even today's depressed market values, the limit does not cover many homes in the California and major city markets.

US Business Finance Corp has years of experience helping home buyers find the home loan that fits their financial picture without putting them in a position of foreclosure when the finance market goes through one of it downward cycles.