Who will benefit from the housing bill?

Seven On Your Side
July 28, 2008 6:55:02 PM PDT
President Bush is expected to sign the massive 300 billion dollar housing bill this week. Homeowners should know it doesn't cover everyone struggling to stave off foreclosure.

Daychia Sledge is nine months behind on both mortgages on her house. The realtor who sold it promised that the value would appreciate so much that she could pay off the second mortgage in months. He said the real estate picture was rosy.

"Don't worry. You wait 3 to 6 months and then you refinance, you get that second loan off, don't worry about it," she said she was told.

It didn't happen. Sledge now owes more than the house is worth.

She is now taking in renters and hoping the new housing bill will help her. The legislation promises three hundred billion dollars in aid. Part of that will help about four hundred thousand homeowners facing foreclosure.

"There are people who bought more house than they can afford and no one can save them and we're not trying to. It would be impossible," Rep. Barney Frank said.

So who is eligible?

Only loans originating before January of this year. Also, the mortgage in question has to be on your primary residence. Vacation homes or rental properties aren't eligible.

You'll also have to verify your income. Banks will want to be sure you'll be able to pay off your new loan.

"It's really complicated and lenders are really overwhelmed on their best day and some of them are not quite responsive," said Ismene Speliotis of ACORN.

That's where non-profit loan counselors like ACORN come in. You can negotiate with your lender yourself or let a professional contact your bank and hold your hand during the whole process, free of charge.

"The sooner you come in, the less you'll fall behind, the better chances you'll have for success," said Speliotis.

One economist estimates that there will be over 2 million foreclosures in the U.S. by next year.

Remember, if you go for loan help, make sure you find a counselor that is not for profit and not someone who stands to make money from your predicament.

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