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Hope for Homeowners
After the passing of a $700 billion dollar plan to bail out Wall Street, where’s the help for homeowners? It’s true that the poor condition of financial institutions is having an adverse affect on the U.S. real estate market. But even if those institutions are repaired by this bill, there will still be millions of distressed homeowners in danger of losing their homes. So, where’s their bailout? Hope, the federally funded housing program through the FHA (Federal Housing Association) is set up to dedicate $300 billion dollars to the ailing housing market. This should come as a relief for distressed homeowners who can use this program to assist them in creating manageable mortgage payments. The Hope for Homeowners program intends on balancing the real estate market by having homeowners work with their current lender to create fair mortgages. Basically, the property in question will be reappraised for its current value and that will determine the mortgage payments. All of these home loans will be 30-year fixed interest rate mortgages. Only borrowers who have the home as their primary residence, received their mortgage before January 1st, 2008 and made at least six mortgage payments that were more than 30% of their gross monthly income are eligible for the Hope for Homeowners program. Also, borrowers must share the equity created on their home as well as future property value appreciation. This program began operating October 1st, 2008 and is set to continue assisting distressed homeowners until September 30th, 2011. While this program isn’t quite enough to fix the all real estate market woes, it certainly presents a step in the right direction. This program that grew from the frustrations homeowners and real estate professionals were having with the struggling real estate market has now reached fruition. And depending on the success of this program, the federal government may delegate more funds to Hope for Homeowners.