Napa Solano Yolo real estate blog

Legislation  ($300 Billion 3 year program) passed this summer took effect yesterday (October 1, 2008) that is expected to help some 400,000 homeowners who no longer can afford their mortgages.

There are a lot of limitations and individual banks and lienholders must volunteer to participate in the program.

Borrowers who now face payments that are over 31 percent of their income on mortgage payments on loans made BEFORE Jan 1, 2008 and must have made at least 6 months of payments on their loans.

The program, called Hope for Homeowners was passed in the massive housing bill this summer and applies only to those homeowners who owe more than their home is worth, pay more than 31% of their income to the mortgage AND their bank is participating AND there are other criteria too.

Contact your lender to find out if they are a part of this program. Executives from Citigroup, JPMorgan Chase, Bank of America and Wells Fargo told lawmakers in September that they have hired new workers to emplace this program, call your lender now and encourage them to take part in the program too, it is their decision to make per the legislation.

It is unclear whether the industry plans to accept the program because it has no promise of a return on their lost money if/when home prices turn upward in the future, investors (banks) will be asked to take a loss on the initial loan on.  

Information contained in this article has not been verified nor confirmed with any banking organization or the US Government, to learn more about the legislation please visit the text of the law at this Housing and Economic Recovery Act of 2008 website.