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July 29th, 2008

Housing Bill: What Consumers Need to Know

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While it might seem like a lifesaver for distressed homeowners on the brink of foreclosure, the housing rescue bill that provides $300 billion for distressed homeowners does not mean automatic relief for every homeowner. In fact, the potential for relief depends solely on the voluntary participation from both lenders and borrowers.

Not only is participation by both sides necessary, homeowners must fit into specific parameters and qualifications to take advantage of the housing relief designed to help nearly 400,000 households.

Be sure to read “Tips For Homeowners On Understanding Sweeping Mortgage Bill” in the Hartford Courant. While not a comprehensive explanation, it provides some very useful information, summarized for consumers from a nearly 700-page bill.

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6 Responses to “Housing Bill: What Consumers Need to Know”

  1. Sue Says: August 15th, 2008 at 3:15 pm

    As a working person who pays their bills, keeps their credit in line and makes sound decisions; I am tired of paying for individuals who overspend on housing and credit…this is basically who this bill helps. Rural communitees need help just getting families into houses under $75,000, not helping someone pay for there $325,000 home who has over $10,000 in credit card debit. Wake up American’s be respnsible, the free ride needs to be over. Our counrty is in debit and I would like to see it get out before my children are adults.

  2. J-Hem Says: August 31st, 2008 at 12:54 pm

    Hey Sue, what would you do if your $75K home suddenly lost 30-40% of it’s value in a matter of a few months ? Just because a lot of Americans don’t want to live in the sticks doesn’t mean we’re irresponsible or our “debit” is out of control. Dropping property values erase one’s abilities to do the responsible thing when they can no longer afford their home ie : sell, or refinance. The impact of millions of displaced homeowners, loans gone bad and abandoned homes is more than enough to justify this bill I asure you.

  3. Rd Says: September 1st, 2008 at 10:43 pm

    Jhem, before you even bought your home, you knew what kind of income you bring in annually and received an estimated monthly payments for your housing. The value of your home going down has no relationship to you making payments. Your mixing two different issues to justify your excuse in not making your payment.

    Whenever you take the risk of making an investment whether the market or real estate you know there are risks. Now that you don’t see the returns we have to eat your mistake. If making an investment was your original intent.

    Either way, purchasing as primary residence or investment, you knew your situation and the risks involved. You want us to bail you out when you weren’t responsible enough to own up to your own financial obligations.

    Like Sue said, this is helping out all those that weren’t responsible enough to wait until families had enough funds to purchase a home within their means. And this means using proper ratios of 25-30% of their income to match the housing payment, not higher.

  4. Kathy Says: September 2nd, 2008 at 2:03 pm

    I totally agree w/ Sue. I moved to another city (I’m single childless hardworking female) so tried to sell my house in my old city with no luck unless i wanted to lose $50,000. I’m now renting it out (losing money every month) I’m smart enough that I can pay for my new house mortgage plus my old house mortgage so I don’t have to lose out the $50,000. but the reason my house depreciated in value by $50,000 is because of all the foreclosures on the market of people wanting to live in $400,000 houses making $50,000/year. I too am paying for all the losers out there and I can’t sell my house now. WE should be helping people sell their homes who aren’t in foreclosure by giving them tax breaks (allow us to write-off our loss on sale) instead of helping losers who probably don’t even pay taxes beause their income is too low and they probably have 2+ kids to get the tax credits from. So to J-Hem my house has lost 20% in value and I’m not in foreclosure!!!! You are irresponsible – declining home value doesn’t affect your payment – J-Hem you obviously bought more home than you could ever afford in the first place.

  5. es Says: September 7th, 2008 at 9:23 am

    RS stated(before you even bought your home, you knew what kind of income you bring in annually and received an estimated monthly payments for your housing.) You are absolutely correct. Everyone knows what they are getting into before they even sign the papers for their mortgate loan.So you shouldn’t cry about not being able to afford it. However, we can not predict the future. There are some who are in positions that they would think to be permanent until they find out that their job is being out sourced to another country or production was down so the company is going to close some of its factories and one of them just happen to be the one you work for. Now that person who was making around 60,000/yr. gets layed off and can no longer afford his or her house anymore. Of course the most obvious thing to do is look for another job. But we all know that that is not as easy as it seems. There are thousands looking for jobs that have run into the same predicament. We also know that we should save up for a rainy day but how long would the rainiy day money last. At some point that money will be used up. Then the most logical thing to do would be to sell your home but with so many houses going in foreclosure your home has lost value now hopefully you can get out of the loan with a few dollars in your pocket but then you find out you may owe money after the sale goes through.
    Everyone who needs help is not irresponsible. Some people are layed off because the companies they work for are not making as much money as they think they should. Worst of all some people are layed off because the company they work for would rather pay someone in India $6/hr for the same job they paid them $60,000/ a year for. Why wouldn’t you want to help this person. This person could be you or me. Many of us think that we are irreplacable at our jobs and no one can fire them or let them go. People also forget that their is a chance that you can become terminally ill. Now what would your family do if you were gone. (Foreclose on the house or use this bill to help them if insurance doesn’t cover enough)

  6. Guitar Bum Drew Says: September 27th, 2008 at 8:57 pm

    I could write an entire book explaining how the United States Federal Reserve Loan Notes (commonly called The Dollar) actually works, but I’ll put it all in a nutshell. The United States Dollar represents loans made by the Federal Reserve, which is a private banking institution that lends money to 12 other Federal Reserve Banks, they in turn lend money to the banks we use for saving and borrowing. All the dollar is, is a fiat note, and because different people pay different percentages for the use of that money, it favors the rich, and discriminates against the poor. Wealthy people have more access to money at lower interest than poor people, and when greedy lenders just want to make a loan, and collect their opening fees, but don’t really care if the borrower can repay it, then you end up with the crisis we are now in. The people that borrow more than they can repay are irresponsible, but the ones the lend the money are not just irresponsible with their own money, they are irresponsible with the life savings of others. Thats why the people that suffer from bad lending practices aren’t the ones that created the crisis. The people that create loans that they know probably will end up in default, should be charged as criminals, but there have to be laws against that first, and that is called “regulation”. We need proper regulations on the banking industry, and they need to be enforced. Thats why we are in our mess now, deregulation, and loose credit gone bad.

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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