A bill known as the “Housing Opportunity and Mortgage Equity Act of 2010″ or HOME Act was introduced on the floor of Congress. By design it is hoped to slow the expected growing number of foreclosures by providing refinancing options on mortgages held by Fannie Mae and Freddie Mac which would lower payments and keep borrowers from becoming a foreclosure statistic. An additional expected result of the proposed bill is that it can simultaneously stimulate the economy by relieving homeowner stress and provide more discretionary income.
From its writing it all seems, if you qualify, like one of those things in life that you should not pass on. You qualify if it is a Fannie Mae or Freddie Mac loan. It does have to be a loan secured by your primary residence but you qualify even if you have defaulted on your payments. It will cost you very little, if anything. The property does not require an appraisal. To me the sweetest thing about it is that the interest rate which as we see and hear about all the time is at prevailing which is always edging lower and lower. While the final terms have yet to be defined, my feeling is that it still is a no-brainer. There will be a reasonable fee for title insurance and likely escrow fees but may be allowed to be financed as well. If the current loan allows for a fee for prepayment penalty these will be waived and loan periods may be up to 40 years. There just seems to be an entire list of reasons why this is a good thing for the consumer.
If the bill is approved there will be a qualifying period of only one year from the date of enactment. But based on the bottleneck that was experienced by first-time homebuyers seeking credits that faced a deadline, I wonder if that may happen here as well.
This proposal makes a considerable amount of sense to me. What are your thoughts or concerns? Please weigh in with them.
