How The Housing Rescue Bill Can Help You Save Your Home From Foreclosure

Sweeping economic reform by the United States government included the passage of HR 3221, which is part of the Housing and Economic Recovery Act of 2008. Signed into law by President George W. Bush, HR 3221 will provide needed relief for over 400,000 American families that are facing foreclosure of their home mortgages.How The Housing Bill Can Help YouHR 3221 works to provide refinancing of your home mortgage at up to ninety percent of its current fair market value. The Department for Housing and Urban Development (HUD) administers the refinancing program under HR 3221. In order to qualify for assistance by way of refinancing your mortgage, you must meet the HUD guidelines as outlined by the government for this program.Guidelines For Refinancing Under HR 3221The first thing that the government wants to see is that you can truly afford the home that you are living in. Many borrowers are in their current situation due to the subprime lending industry and its willingness to loan money for home purchases to anyone that asked , which is now known as the subprime mortgage boom. You must show proof of available income, and that your anticipated mortgage payment will be no more than 29% of the combined income for your entire household. If your combined household income is $5,000, then your mortgage payment can be no more than $1450.In addition, your lender must agree to absorb a loss when your mortgage is bought out. HR 3221 allows for mortgages to be bought from lenders by the Farmers Home Administration at 85% of their current fair market value, with closing costs not to exceed 90% of the fair market value, with both closing costs and mortgage bundled together.Alternatives To HR 3221 RefinancingNot all homeowners will qualify for home rescue under the HR 3221 refinancing structure. You may be among them if you cannot prove or verify that your combined household income is adequate enough to repay the FHA when they buy your mortgage at up to 90% of current fair market value, or if your lender will not agree to the buyout. If you are unable to take advantage of the HR 3221 refinancing program, you can always seek out your own form of mortgage refinancing.There are many lenders who are still refinancing mortgages regardless of the market crisis. By refinancing your mortgage now, you can avoid foreclosure. The lender will write out a new loan, effectively buying your mortgage and allowing you to obtain different terms that are easier to manage with your current income. Many times, the refinanced mortgage will be written for a longer period of time, up to thirty years.You can also find lenders who are willing to help you save your home on the Internet. Online lenders have more capital to invest than your local bank and therefore are more willing to take the risks associated with home mortgages in the current housing market.