MortgageNewsDaily.com - A key committee in the House of Representatives late Thursday passed legislation that would make up to $300 billion in federally insured mortgages available to borrowers facing foreclosure.
The bill, H.R. 5830, the Federal Housing Administration (FHA) Housing and Homeowner Retention Act was passed out of the House Financial Services Committee and on to the full house by a bipartisan vote of 46 to 21.
Under the principle provision in the bill, the FHA will guarantee a new loan to a troubled borrower if the existing lender will agree to accept a short payment (i.e. less than the outstanding balance of the loan) in full payment of the old loan. The new loan would be limited to no more than 90 percent of the property's value and must have terms that the borrower can reasonably be expected to pay.
When the borrower sells or refinances the home the borrower will pay from any profits either an exit fee equal to 3 percent of the original loan amount or a declining percentage of any net proceeds attributable to home appreciation (from 100 percent in year one to 50 percent in years four and beyond,) whichever is larger. The government, therefore, would only be at risk if the borrower defaults on the new loan in which case he would lose the house.
Read more here: http://www.mortgagenewsdaily.com/522008_FHA_Short_Pay_Loans.asp
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About Me
- Brian Diez
- I spent several years as a stock broker before 9/11. The tragedy of that day made me rethink my career. I didn't want to just cater to rich people who like to gamble in stocks. The money was good, but it left me feeling empty inside. Some of my friends got into the mortgage business and I decided to try it part time until I figured out my next move. Sometimes Plan B is better than Plan A. I fell in love with home financing. Not only is the field booming, but it's incredibly rewarding. To help someone buy their first home or help them avoid foreclosure is an amazing experience. I find working with people who need help fixing their credit and getting back on their feet is the most rewarding of all. I collect my thank you letters like badges of honor. Its my goal to not only help people out of their financial challenges, but to educate them so they don't fall into the same old rut again. I want to teach my clients that home financing is the greatest tool in the world. It can make all their dreams come true. There are more millionaires made in real estate than any other field. This is my area of expertise. Let me show you how its done.
