ACORN is speaking against it—maybe it will actually help! This past summer Congress passed “Hope for Homeowners” which took effect Monday. Distressed borrowers can now refinance into 30-year fixed mortgages with the backing of FHA. According to the Boston Globe,
To be eligible, the borrower’s home must be the primary residence; the mortgage must have originated on or before Jan. 1, 2008; and as of March 2008, an applicant’s mortgage payment must account for more than 31 percent of gross monthly incomeâ€¦.The mortgage servicer must be willing to take a loss and write down the loan – insured by the Federal Housing Administration – to 90 percent of the home’s current appraised value. If the home is sold, the homeowner must agree to share any appreciation with the FHA and the refinancing lender. The program, authorized by the Economic and Housing Recovery Act of 2008, will be in effect through Sept. 30, 2011.
And yet, the used car salesmen on the Hill don’t want to let Hope for Homeowners or the changes to Mark to Market accounting have their effect. Instead, Pelosi is asking Blue Dogs to take one for the team and hope that defaulting on their “PayGo” promise won’t have the same result as “No New Taxes” did.