Frequently asked questions about the Housing bill in effect October 1st

The Department of Housing and Urban Development's (HUD) website has a comprehensive FAQ section about the new housing bill in effect starting October 1st which involves the 'Hope for Homeowners' provision. The website also includes step by step overview of how the program works .
The HUD wesbite is a great resource for anyone who wants to learn more about the program. There are features including links to forms, sections for borrowers, lenders, credit/foreclosure counselors, and examples concerning the concept of 'shared appreciation.'

Details on the Housing and Economic Recovery Act of 2008

The 'Housing and Economic Recovery Act of 2008' (HERA) - the bill President Bush signed into law back in July - is now in effect as of October 1, 2008. The Mortgage Bankers Association has produced an excellent summary of this new law . The portion of the law many people were anxious to learn more about is the 'Hope for Homeowners' section, giving the FHA $300 billion in mortgage insurance authority. Qualified homeowners may be able to refinance out of an existing loan on their primary residence into a new, affordable loan with a reduced principal balance and interest rate. The new loan would be insured by the FHA. The existing lender would have to agree to the required reductions. The principal amount of the "new" loan cannot exceed 90% of the property's current value. The loan has to be a 30 year fixed rate loan.
There are many eligibility requirements for borrowers. For example, the existing loans must have been originated before January 1, 2008, and borrowers must have "debt to income ratios" of greater than 31% as of March 1, 2008. Those accepting new loans must agree not to place 'junior liens' on the property for 5 years - this would include second mortgages or HELOC's during that period. There is also a 'shared appreciation' provision, with phased-in vesting. After 5 years, the borrower and government would "share" equity at 50% each on sale of the property.

Federal government may create an entity to take over banks' bad debt

Late breaking news on September 18, 2008 - the U.S. government may create a new entity like the Resolution Trust Corp. during the Savings and Loan crisis of the late 1980's and early 1990's that will take over banks' bad debt. This may result in alleviating the 'credit crunch' that has driven up the cost of borrowing for businesses. With more 'liquidity' in markets, banks may once again be able to make housing loans on a wider scale to credit worthy borrowers who would like to buy homes, but are presently having difficulty securing financing.
One hope would be that this would eventually help reduce the glut of inventory of homes for sale, by making credit easier for buyers who qualify.

Collier County Foreclosure Task Force profiled in BUSINESS CURRENTS

The Collier County Foreclosure Task Force was featured in the August, 2008 edition of
Business Currents , a prestigious monthly business magazine circulated widely throughout Southwest Florida. The article chronicles how the Task Force was formed, and how numerous individuals, organizations and agencies joined forces to assist homeowners facing the prospect of foreclosure in Collier County. For those who may be interested, you can also learn how to become involved in this grassroots initiative.

HOPE NOW ALLIANCE DAY IN ESTERO ON AUGUST 22nd

The HOPE NOW Alliance is hosting an event on at the Estero Community Center on Friday, August 22, 2008 from 2:00 p.m. to 8:00 p.m. which is free and completely open to the public. The HOPE NOW Alliance consists of most of the major mortgage lenders throughout the country. This 'Alliance Day' event is an opportunity for you to meet directly and individually with representatives of these lenders to discuss possible solutions to problems you may be experiencing in keeping loan payments current. These representatives have the authority to enter into agreements with borrowers. Also present will be certified credit counselors and foreclosure prevention specialists from area non-profit agencies, including the Home Ownership Resource Center of Ft. Myers. The address for the Estero Community Center is 9200 Corkscrew Palms Blvd., Estero FL 33928. Free parking is available. For more information on the HOPE NOW Alliance Day event in Estero, you can email Larry Gilmore at Larry@hopenow.com .

Fannie Mae's 'HomeSaver Advance' program

Fannie Mae's 'HomeSaver Advance' program is a new loss mitigation initiative designed to bring a cure to the delinquency on a first lien mortgage loan. Ask your lender or loan servicer if you qualify. Under the program, unsecured personal loans of up to $15,000 are available to qualified borrowers to cure arrearages when you have fallen behind on mortgage payments.
The program is designed to assist folks who can make payments under their current loan terms - but can't make up a few months of missed back payments. A temporary loss of a job that resulted in several months of missed payments may be one example - so long as new employment has been secured, and the mortgage payments can be made moving forward if the sum in arrears can be addressed under the loan program. There are several other restrictions - you can check out the Fact Sheet contained on the link above to learn more. You cannot be more than 9 months behind on your mortgage to qualify. You may be able to use the loan to make Homeowners Association payments that are outstanding, in addition to outstanding principal, interest, taxes, and insurance.

President Bush signs sweeping new Mortgage Relief Bill

President Bush on July 30, 2008 signed into law a Bill intended to 'rescue' about 15% or so of the homeowners across the country in fear of losing their home to foreclosure in the next year or so. The measure includes $300 billion in new loan authority for the government to back cheaper mortgages for troubled homeowners - among many other provisions.
Stay tuned for further details, as the practical effects of the new law become more clear. Information as to eligibility and timelines should become more defined in approximately the next 60 days.

New Hotline offers help to those in pre-foreclosure

If you are a Florida homeowner not yet in foreclosure - but have already missed a mortgage payment or fear that you soon will - there is a new statewide pro bono project that may be able to assist you.
The Florida Bar, The Florida Bar Foundation, Florida Legal Services Inc. and the Real Property Probate and Trust Law Section of The Florida Bar have launched the FLASH (Florida Attorneys Saving Homes) toll free hotline (866) 607-2187 which will field calls from 8:00 a.m. to 4:00 p.m. Monday through Friday. Hotline callers will answer a few initial questions to ensure accurate placement with pro bono attorneys, who will then negotiate with lenders on behalf of homeowners.
The hope is to create a relationship in which the lender and the homeowner can together create a loan that allows the homeowner to remain in the home and avoid foreclosure - a "win-win" situation for all involved. Learn more by visiting The Florida Bar's website .

Beware of Foreclosure Rescue Scams

There are plenty of 'scam artists' out there looking to take advantage of folks who are desperately trying to avoid foreclosure. To protect yourself - learn more about the techniques used by the predatory agencies or individuals out there. The Federal Trade Commission has published an article on "Foreclosure Rescue Scams" that outlines the variety of tactics used to get your money. Don't become a victim. Never sign a document that you don't fully understand. Seek the advice of a competent attorney if you have any questions.

Managing your stress

Are financial difficulties starting to wear you down emotionally? You are not alone! The American Psychological Association in an article entitled "Managing Your Stress in Tough Economic Times" offers some helpful tips on how to deal with your stress over money and the economy.