President Bush signed historic legislation today that props up mortgage financiers Fannie Mae and Freddie Mac and authorizes a $300 billion expansion of FHA loan guarantee programs aimed at helping trouble homeowners avoid foreclosure. The bill, set to become law on Oct. 1, 2008, will help distressed homeowners who are at risk of foreclosure to get more afforadble, government-backed mortgages and get out from under exotic mortgages they cannot afford.
WHO does the Housing Rescue Program Help? In order to qualify for assistance, borrowers must meet the following conditions:
1. Owner Occupied
2.Loan must have been issued between 1/2005 to 6/2007
3.Borrower must be spending 31% or more of their gross monthly incomes on their mortgage payments as of 3/1/2008.
4. Borrower does NOT need to be in default
5.Borrower must attest that he or she is not deliberately defaulting just to obtain lower payments.
This has its downside, such as a fee to the FHA the homeowner pays. (1.5% of the principal annually) as an “insurance premium” for guaranteeing the loan. There is also a 3% exit fee if they sell or refinance within the year.
How to apply? Contact your current mortgage lender or go to http://www.hud.gov/ll/code/llslcrit.cfm