Foreclosures and Debt

Not really, unless you call bailing out non defaulted loans stopping foreclosure. Some say it shows that at least the White House is paying a little attention to the growing problems of the housing market.Bush’s proposal seems to only provide relief for borrowers whose adjustable rate loans are not in default and are facing or have faced higher monthly payments due to an upward adjustable rate reset. These borrowers will be able to have their loans refinanced with resources and funds from the Federal Housing Administration.

The Federal Housing Administration is a government agency created in 1934 to help low and moderate-income Americans afford homes.

Under the Bush proposal, called the “FHA Secure” which according to FHA officials, would be implemented immediately. This program is a significant change from previous borrowing rules because prior to this program, FHA does not insure refinanced loans from borrowers who are currently delinquent.

This means that many families who are struggling now will be able to refinance their loans, meet their monthly payments and keep their homes,

Bush said.

With the amount of expected number of foreclosures to reach into the millions, this Bush proposal would only help those who fall behind in their payments, an estimated 200,000 homeowners, because their mortgages have reset higher. This program does not address the problems of homeowners who have received default notices and in the foreclosure process, which are the majority of the foreclosures. There is more needed to stop foreclosure under this FHA Secure plan and we will have more on it, so check back!

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