Will FHA Legislation help Homeowners?
The U.S. Senate in mid December passed the FHA Modernization ACT of 2007. I am not sure what modernization has to do with anything but we will look at the semantics later. This bill was passed to help homeowners who would be facing foreclosure from the risky loans given over the last few years. Many of my clients ask me if it will help. My answer is yes. One point to mention is that this is a shell game to cover the tracks of the FHA and the government. They must blame the banking systems for risky loans. Then, they must exercise their power to say they are helping. Let's not be fooled here, the FHA wanted the market of home owners to be larger.
The risky lending practices allowed by FHA is what caused the housing bubble that has now burst. The resetting of these loans, in this new legislation, will help people with mortgage loan payments which were set to skyrocket. Huntsville homes for sale and many other markets were beginning to see large numbers of foreclosures because of the defaults of homeowners. These home owners could no longer afford their payments.
This new environment that has been created will have some positive affect. The foreclosures will bring in the savvy investor who will turn these properties into profits. There will be some losses to home owners and the banking system. Now, the new legislation will keep it from being as severe on the economy.