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Hope for Homeowners Act of 2008
Congress passed the Hope for Homeowners Act 2008 which includes a three-year period DHA will insure a total of $300 billion of loans over this period. This plan allows mortgage consumers to cancel their old mortgage loans and get a 30 year fixed-rate loan for up to 90 percent of the homes current value.
Borrowers that have spent more than 31 percent of their monthly incomes on their mortgages as of March 1, 2007 can qualify and the loan must have originated no later than January 1, 2008. This must be the borrowers residence and income must be verified.
This plan also includes if the borrower sell during the next five years, they must agree to share 50 percent of any profits from the resale with the government. The equity must be repaid due the maximum amount on the new loan will be capped at 90 percent to the current market value. This gives the borrower 10 percent equity in the home instantly.
This act goes into effect October 1, 2008 and through September 2001. This program will be at full operating capacity by next year.
Borrowers need to know that the decision to write the loans remains up to the banks and will they be willing to take a loss. If you are a homeowner facing foreclosure don't wait for this plan because it is not a guarantee. Continue to seek help and don't give up.
Bankruptcy Pros and Cons
A bankruptcy will affect your future credit. However, it can improve your short-term quality of life and possibly keep you from losing your home, car, and other assets. Personal bankruptcy is generally considered the debt management tool of last resort because the results are long-lasting and for-reaching. If you decide bankruptcy is the way for you, it is important to weight the options.
CONS
· You will lose all your credit cards (unless you pay them off before filing.) You may also have to give up some luxury possessions
· A recent bankruptcy makes it nearly impossible to get a mortgage (although you should be able to do so within about five years).
· A bankruptcy stays on your credit report for 10 years, making it difficult to acquire credit, buy a home or car, get life insurance, or sometimes get a job.
· Not all debts may be “discharged” in a bankruptcy. · Student loans and back taxes (within 3 years) are prime examples.
· Bankruptcy is an admission of defeat, an embarrassment.
· If I declare bankruptcy, my name will be in court records and may appear in the newspaper.
· You will have to explain to a judge or trustee how you got into a financial mess.
· It will be a long before you are able to get credit cards again.
PROS
· When you file bankruptcy, it stops all collection actions by creditors, including foreclosures, repossessions, and garnishments. If you have filed with an attorney, she or he shields you by handling all inquires from creditors. es allow you to exempt your home, car and other essentials, so you will not wind up homeless and unable to get around.
· Declaring bankruptcy now can get you started sooner on rebuilding your credit and your life. If there is another disaster, you may be able to amend your existing Chapter 13 plan to accommodate it.
· While nothing will get rid of student loan debt, at least bankruptcy will prevent your lenders from aggressive collection action.
· So is being sued for bad debts, having your car repossessed or your home foreclosed on. · If your creditors sue you, your name will be court records and may appear in the newspaper.
· Both judges and trustees have heard far worst stories than yours.
· Good. Credit cards helped you get into this mess. They can get you into another one just as quickly.
The Anatomy of A Mortgage
Principal : The money used to pay down the balance on the loan.Interest : The fee you pay for borrowing the money.
Taxes: Homeowner taxes you to the city in which you live in.
Insurance: Insures the property. Also relates to private mortgage insurance, which protects the lender in case of default.
FHASecure Guidelines
FHASecure, like all FHA products, will be underwritten to ensure the borrowers have the eligibility to repay the loan, will require escrow for taxes and insurance, and continue to offer unprecedented foreclosure prevention assistance. The FHA has never permitted and will not include pre-payment penalties or teaser rates that are common in exotic mortgages and have caused much of the current market troubles.
To qualify for FHASecure, eligible homeowners must meet the following five criteria:
- A history of on-time mortgage payments before the borrower’s teaser rates expired and loans reset;
- Interest rates must have or will reset between June 2005 and December 2008;
- Three percent cash or equity in the home;
- A sustained history of employment; and
- Sufficient income to make the mortgage payment.
FHASecure is designed for families who good borrowers but were steered into high-cost loans with teaser rates,” said Assistant Secretary for Housing-FHA Commissioner Brian Montgomery. These homeowners, many whom are minorities, need a safe, affordable mortgage product that will help build wealth. All FHA borrowers pay mortgage insurance premiums to offset claims to the FHA insurance fund and ultimately prevent risk to the taxpayer.”
Plans to relax FHAsecure guidelines would expand eligibility standards to include borrowers with adjustable rate mortgages who were late on two monthly mortgage payments in the past 12 months, even if they were consecutive. Those who were late on three mortgage payments in 12 months are also eligible for help but they must meet loan-to-value ratios different from those who only missed two payments.
A loan-to-value ratio is the percentage comparison between the unpaid principle balance of the mortgage and the appraised value of the property. On average, it takes about 30 days to get an FHASecure loan through maybe the new guidelines will allow more people keep their homes.
Giving Your Lender a Deed In Lieu of foreclosure
First you will have to get the lenders permission to do the transaction. If your ;ender approve of this transaction the foreclosure process will stop and your lender will own the property without a foreclosure sale.
Reasons for Deed in Lieu
- You don want a foreclosure on your credit
- You have no equity in the property, or negative equity in the property
- You cannot afford your mortgage payments
- You have tried to sell your home but unsuccessful
Benefits to a Deed in Lieu of Foreclosure
- The foreclosure stops immediately
- You protect your credit rating
- Your lender cannot get a deficiency judgment( meaning your lender cannot come after you for the remaining owed after the sale)
Are you in the Military? Use your status to stop foreclosure.
To use the Soldier 7 Sailors Civil Relief Act you must be able to prove:
- You are on active duty or co-signer of a service member on active military duty in another city, state, or country
- You bought your property before your active duty in the military
- You, or your dependents own the property
- Your lender has started foreclosure proceedings
- Your ability to meet your financial obligations has been "materially affected" by you military service
To use this you may need to consult an attorney or your military commander. You can also research the military website, www.miliatry.about.com
You can use this also to
- Stop foreclosure
- Invalidate a foreclosure sale
- Reduce your interest rate( if you are on active duty you can request your interest rate be reduced to the statutory interest rate and you do not have to be in default or in foreclosure)