Debbie Espinoza San Diego Real Estate

Why Foreclosure Relief Act is NO Relief..

The government passes the Foreclosure Relief Act off as a help to homeowners in distress and facing foreclosure. FHA, the Federal Housing Authority proposes to "help" in an act that actually turns the FHA into a profit center at the expense of lenders and homeowners. Here are some of the details of the bill that may surprise you:

• The new conforming limit will be raised to $625,000 from it's current limit of $417,000.  (this is a good thing.. ONE thing done right!)
• You cannot have a HELOC, 2nd, or any other mortgage on your home. You will either have to pay them off or negotiate them out.
• The loan must have been originated between June 2005 and June 2007.
• You must get your current lender to write down the loan amount to 85% of the CURRENT APPRAISED value! (good luck!)
• and this is so you can finance in the 3% fee that FHA is going to charge you for the pleasure to refinance with them guaranteeing the lender from any further losses ( I think they may have taken all the losses there were.. thank you very much!..)     Just so you catch this; (and the following FEES that the FHA will be  charging for this service) 3% on a $300,000 loan is $9000.00 !! (Thus, the reason that the lender must write down the balance of the loan, so that when FHA puts their HIT in, you don't go over the maximum allowable loan-to-value of 95%)
• WAIT! there's more... FHA is also going to charge you 1.5% per year to pay for the insurance they are placing on the loan to protect the lender from further losses. (ding, ding, ding)
• Oh. THAT"S NOT ALL!!! When you refinance or sell- Yup, the FHA will take ANOTHER 3%.. (thank you very much)
• and.. for the final kicker... the Federal Government is now your homeowner partner. You may ask "My Partner?" .. yes, when you do sell Uncle Sam will take AT LEAST 1/2 of your profits when you sell your home! 100% the first year, 90% the second year and 10% less each year until the minimum of 50% is reached.  (How NICE of them yes???)
• PLUS: no 2nd mortgages or HELOCS for 5 (five) years except for very limited circumstances.
• There is also listed a First Time Home Buyer "credit" of $7500. Described as being paid back over 15 years at no interest. So, it's an "interest free loan"- NOT a true credit. (at least not in my dictionary)

Here are some other stipulations of the new loan:

• You must prove that you did not lie on your application to get your current loan. (How they are going to do that.. I don't know..)
• NO other debt on the house!
• You must PROVE your income with 2 years tax returns (could be a REAL mess if you did fudge a bit on your current loan no??)
• This must be proven to be your PRIMARY residence

So, Are you just chomping at the bit to sign up??? Well, it won't take effect until October 1, 2008.

Unless you want to wait AND pay A LOT for the priviledge of having the FHA help you out. Call us TODAY and find out how a low cost loan modification just may be the answer you are looking for.

CALL TODAY! (877) 265-1409 xt 800