Hope for Homeowners Act of 2008

Just like the title says, there is hope for homeowners out there and it was passed into law on Wednesday. The legislation will enable homeowners to work with the FHA to replace their preexisting adjustable rate mortgages with 30-yr fixed rate loans for up to 90 percent of the homes current value.

In order for homeowners to be eligible for the restructured FHA loans, borrowers need to have spent greater than 31 percent of their income on their mortgages as of March 1st. In addition, any potential borrowers must have their original loan on their primary residence, have their income verified and cannot have had the troubled loan originated after Jan. 1st, 2008. The lending institutions still have the final say in the approval process.

Whether or not this act will benefit the American people is difficult to say as politicians have a way of applying an airbrush to problems that covers them up but does not solve anything.

The program will take effect October 1st and will run through September 2011.

Source: MSNBC

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