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Housing And Economic Stimulus Act - FHA, VA, HUD, and Conforming Loans Limit and Protecting Your Mortgage

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The United States Housing and Economic Recovery Act of 2008 was designed primarily to deal with the subprime mortgage meltdown. In that time frame, many home loans were defaulted upon, and the result was an onslaught of foreclosures. As such, there was a need to revitalize the economy. One way to do this was to make sure that every homeowner had access to affordable housing. With the Housing and Economic Stimulus Act in place, this is now a reality.

Among the many pieces of legislation included in the Act were the Paying Home Loan Modification Bonus and the Interest Extension for Rate Reduction Refinancing Programs. The Paying Home Loan Modification Bonus is available to qualified borrowers who have difficulty paying their monthly mortgage payments due to circumstances beyond their control.

This bonus can help get people into affordable housing by increasing the borrower's loan modification eligibility. Qualifying borrowers will have their interest rate reduced by up to five percentage points and principal balance reductions of up to $100 per year.

The second piece of the Act is the Home Affordable Modification Program. This program targets subprime mortgage holders. Borrowers who are suffering from financial difficulties, or who cannot pay their loan payments can apply under the Home Affordable Modification Program. To qualify, they must be residing in a home contracted through the Home Affordable Modification Program. When an appraisal determines that the new modified loan payment arrangement will benefit the borrowers, the house is approved and modifications are made accordingly.

Another necessary provision of the Act is the Secure and Fair Enforcement for Mortgage Brokers and Property Appraisers Act. This Act encourages and regulates the real estate market, making it more secure and fair for both lenders and borrowers. It also establishes the Inspector General's Office for Housing and Urban Development (HUD) to implement and enforce the Act's provisions. Borrowers and property owners can now receive HUD information and assistance when they need it regarding subprime mortgage modification.

The third provision of the Act is the Secure and Fair Enforcement for Mortgage Licensing Act. This Act requires all persons subject to licensing to maintain continuous education credit requirements. They must also make timely payment of any dues and fees. The purpose of this Act is to protect homeowners and encourage responsible mortgage lending.

The fourth provision is the Tax Credit for Foreclosed Homes. Homebuyers and homeowners can account for this tax credit if they purchase a new home, restore an existing residential structure, or convert it to an energy-efficient home. If they intend to buy a new house, they will not be eligible for the tax credit if they have purchased a home within a single year. This tax credit is also applicable for persons who live in older homes that are not being restored. If the owner of such a house dies, the surviving spouse or relatives may also apply for this credit and obtain the tax benefits.

The fifth provision is the Conforming Loan Limit Act. This Act empowers HUD to waive specific fees related to the Real Estate Settlement Procedures Act. This Act also allows borrowers to obtain guarantors to ensure that they receive affordable housing. This Act has no specific details, but the intention is to improve the housing finance system in urban areas. The Conforming Loan Limit Act could affect FHA's participation in the National Association of Home Builders Loan Program.

Title II of the Housing and Economic Recovery Act provides for the establishment of consumer protection and consumer relief initiatives. These initiatives would include the implementation of a national consumer-debt collection protection act. Title III of the Act makes it easier for victims of home foreclosures to acquire mortgage modifications. This Act also makes it easier for homeowners to modify their loans and refinance them at better terms. Title IV of the Act provides for the registration of manufactured homes and other permanent residences.

Refinancing mortgage loans are designed to be confusing and complicated, especially for first-time borrowers. Lenders want homeowners to refinance so that they can lock in the lowest interest rate and closing costs. However, loan modifications and protection plans are often not included in standard refinancing packages. Fortunately, there are many options available for borrowers who wish to protect their refinanced mortgage loan and reduce their mortgage payments.

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Plentii understands that most people opting for mortgage protection receive it from the new lower monthly mortgage payment. The borrower pays the remaining balance out of pocket. Unfortunately, many homeowners find out too late that their new lowered payments do not improve their financial situation.

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