| To avoid foreclosures in the continuing housing market | | | | write-downs and more user-friendly terms, borrowers |
| crisis, the FHA has been given permission to insure up | | | | agree to share potential profits from future sales of |
| to $300 billion in new loans, as long as lenders are | | | | their homes with the FHA. That helps to offset the |
| willing to cooperate with home loan modification | | | | financial burden on taxpayers by reducing the overall |
| programs. The funds and expanded authority were | | | | cost of the initiative. |
| granted to the FHA under the recently passed Housing | | | | When Congress passed the Housing and Economic |
| and Economic Recovery Act of 2008. | | | | Recovery Act of 2008 during the summer, it did so by |
| The Act also includes nearly $15 billion in housing tax | | | | a wide bipartisan margin but the Bush administration |
| breaks, including valuable tax incentives for first-time | | | | promised to veto it. The president backed down and |
| homebuyers. But American consumers faced with | | | | signed the bill, however, once it reached his desk. |
| troublesome mortgage payments are most exited | | | | Since the bill passed the economy has worsened, and |
| about the home loan modification programs that will | | | | the entire world faces one of the worst financial crises |
| allow the FHA to basically assume responsibility for | | | | in history. Some homeowners worried that the big |
| bad loans and borrowers and refinance them into new, | | | | $700 billion rescue plan might overshadow the FHA |
| FHA-insured 30-year fixed-rate mortgages. To | | | | loan modification project, but representatives of the |
| participate in the emergency program banks and | | | | FHA have reassured them that everything is still on |
| mortgage companies have to voluntarily agree to do | | | | track. That is great news for homeowners needing to |
| loan modifications and mortgage rewrites to make | | | | refinance before banks take away their homes, and |
| sure that homeowners do not owe more than the | | | | the loan modification plan is scheduled to continue at |
| current market value of their houses. In return for the | | | | least for the next 2-3 years. |