Once again a Bill has been passed on Thursday 8th May 2008 to relieve millions of homeowners who are facing problem with their mortgage payments. To stabilize the housing market, Massachusetts Representative Barney Frank, who is the chairman of the House Financial Services Committee, has authored the bill.
The main provision of this new bill is that FHA will guarantee about $300 billion of refinance loans. The borrowers who have taken sub-prime loan and ARM and also have the ability to pay the refinanced loan can have a reduction on their principal balance and it will be converted into 30 year FRM. That will make monthly payments lower so that they can afford to pay off their mortgages.
This is totally a voluntary plan as because no lender or bank require to participate in it. If they accept the reduction on the mortgage amount of borrowers in default, or those likely to be in default, then they will get federal guarantee on the refinance mortgages. Any loss from the defaulted FHA backed loan will be borne by the Federal government. The lenders or the bank will not have to bear any loss. It is predicted that this Democratic House Bill will provide help to more than 1.5 million troubled borrowers.
[tags]mortgage bill, mortgage help, fha refinance[/tags]