By Ajeet Khurana
Now that so many people are defaulting on their mortgages the federal government is stepping in to offer homeowners some relief. Of course, not all homeowners will qualify for the relief but many will.
In fact, some of the banks like Fanny Mae are offering those behind on their home loan payments personal loans that cover their back payments. This will bring them current on their house loan and help them catch up and stay current in the future.
This is a bail out that nobody has ever received before, so it is definitely worthwhile for those individuals who are behind in paying loan.
If you are feeling the pressure and are behind on your loan then you may want to call your bank and talk with them to find out what options are available to you. Banks are dealing with so many foreclosures and defaults that they will probably do whatever possible to help you out and allow you to catch up on your mortgage.
But, it is important for you to call and talk with a loan adviser to find out what options are available to you and what you can do to catch up and keep up with the monthly payments in the future.
Mortgage Relief Act
The Mortgage Forgiveness Debt Relief Act of 2007 was initiated to help families refinance their homes in order to reduce their monthly payments and avoid foreclosure. The Act allowed homeowners to refinance their home within a three-year period of time and need not pay higher taxes.
What this means is that any debt forgiveness given as a result of a house devaluation means that taxes will not need to be paid on the forgiven portion. Before any forgiven portion of a mortgage was considered income and taxed. Under this Act that is no longer the case.
Many Americans have taken advantage of this and hopefully more will continue to do so in order to save their homes rather than default and go into foreclosure.
Currently, with house prices dropping at unprecedented rates with no relief in sight, owners who are behind on their mortgages just don't see the point to pay up and keep their current loans when they feel they are losing any way.
Only the future knows what will happen with the mortgage crisis and whether or not Americans will be able to overcome the foreclosures that are ravishing the nation.
The more foreclosures that occur the worse the economy will become. So it is really important for people to work with their lenders and find a way to save their home and make their monthly payments.
If everyone works together then a full-blown recession may potentially be avoided. This is really important to keep the country growing and keep people employed.
If a full-blown recession occurs things will only get worse for homeowners and everyone else. Hopefully the banks and homeowners will be able to work together to reduce the foreclosures and the recession will only be mild.