Will this new housing bill that was signed help my case?

[FoolFromAZ]

I bought my house in mid 2006 for 315K in arizona. I put down 18k when I bought my house and I had a single loan for 297K and I was paying $194 every month for PMI. When my house value went up to 360K, I applied from HELOC and I got 50K and used that to paid down my first mortgage. after two years, now I have 240K on first mortgage and 40K on my HELOC. I am right now paying $2000 for my first mortgage and $400 for my HELOC. When I tried to refinance to 30 yr fixed (as I am 2 yrs in to 5 yrs ARM) and bring down the payment to less than $1800, I could not do that as my home is apraised for only 265K now. I have total mortgage balance of 280K. Now the new housing bill has been signed. Do you think it would help my situation?

thanks

[noppenbd]

I am guessing not if the HELOC is through a different lender than your 1st mortgage. You would have to get the HELOC bank to basically give up their lien on the house so the first mortgage holder can adjust your loan to a lower balance. If they are both through the same bank you may be in luck.

[gamecock43]

Please be sure you read about the consequences of this bill. I have heard that if you sell the house anytime in the future you may have to hand over 50% of your equity. Plus pay 1.5% of the mortgage balance every year. For a 280k loan thats about 3k you pay so that you have a lower monthly loan.

[FoolFromAZ]

Please be sure you read about the consequences of this bill. I have heard that if you sell the house anytime in the future you may have to hand over 50% of your equity. Plus pay 1.5% of the mortgage balance every year. For a 280k loan thats about 3k you pay so that you have a lower monthly loan.

thanks for the info. btw where do i find the pros and cons for this new housing bill?

[gamecock43]

It's the talk of the news today, so I imagine that watching the news will tell you about it. But this is what I read it on another forum:

"the new Housing Bill is not a government loan program. It designed to provide lenders with guidelines for holding the workouts to a standardized set of criteria. It's not a give-a-way program for borrowers

Lenders are not required to give you a better deal under the new law, even if you do meet the qualifications. They may not be willing to negotiate unless they think you are truly on the cusp of foreclosure.

If you manage to get a new loan, you cannot take out a home equity loan for at least five years after you get the new mortgage. You will also have to pay a 1.5 percent fee each year on the remaining balance. Finally, you have to hand over no less than 50 percent of any appreciation on the home to the government once you sell. Sell the house in less than five years, and you will have to turn over as much as all of the gain.'

Basically I THINK that if you have a mortgage and plead your case to the bank...they will SELL YOUR MORTGAGE to the govt for 90% of the original mortgage price. The bank only takes a 10% hit, and the govt is assuming the responcibility that you pay the loan. If you forclose anyways, the govt owns your house, and the taxpayers pay for it, rather than the bank. Thats what I understand...but I have not really looked into it and could be way off.

[FoolFromAZ]

It's the talk of the news today, so I imagine that watching the news will tell you about it. But this is what I read it on another forum:

"the new Housing Bill is not a government loan program. It designed to provide lenders with guidelines for holding the workouts to a standardized set of criteria. It's not a give-a-way program for borrowers

Lenders are not required to give you a better deal under the new law, even if you do meet the qualifications. They may not be willing to negotiate unless they think you are truly on the cusp of foreclosure.

If you manage to get a new loan, you cannot take out a home equity loan for at least five years after you get the new mortgage. You will also have to pay a 1.5 percent fee each year on the remaining balance. Finally, you have to hand over no less than 50 percent of any appreciation on the home to the government once you sell. Sell the house in less than five years, and you will have to turn over as much as all of the gain.'

Basically I THINK that if you have a mortgage and plead your case to the bank...they will SELL YOUR MORTGAGE to the govt for 90% of the original mortgage price. The bank only takes a 10% hit, and the govt is assuming the responcibility that you pay the loan. If you forclose anyways, the govt owns your house, and the taxpayers pay for it, rather than the bank. Thats what I understand...but I have not really looked into it and could be way off.

Thanks for the response game. I just read an article about this. It says that lender for second mortgage (home equity or heloc) has to forgive the debt and in the future, if house appreciates, then they will take the profit or something. If what I understood was right, this can help in my case as well. I am currently paying $2400 toward mortgage payment, I dont think the house price will come back up to breakeven (around 330k to 340k for me) in next 5 yrs.. If I could reduce my monthl payment to $1500 and live in the house for next 5 yrs and get 50% of the profit (if any). I would be more than satisfied.

[gamecock43]

Ok, well I am glad you have a strategy.

Based on what you said, I am assuming you are going to lower your mortgage to a manageable monthly sum, live there for a few yrs and sell?

I assume you want to stay in the house a few years because you will be able to make the monthly mortgage = to the cost of renting in the same area?

I am just wondering why you want to stay in the house a few yrs and then sell and walk away with nothing. Why not sell now and walk away with nothing. Why not get the payments to a managable amount while its on the market and then you will walk away with nothing when it sells.

I am just not to clear on this housing bill. How does it help a homeowner like you, when you just said you want to unload the house anyways?

I understand if you want to keep the house, and you get to refinance your monthly payment to a lower amount.

I know you said you put in a good 18k downpayment, so if you sell the house in 5 yrs and only keep 1/2 the equity...thats 9k you get...as opposed to selling before the 5 yrs and the govt gets all 18k..right? But what if you sell it at a loss- the govt gets your 18k no matter when you sell it.