The New York Times reported today that it looks promising that the Senate will approve a bill that will help many homeowners with refinancing or purchasing options. It is important to note that this bill has not been passed yet, but it is guaranteed to be a hot topic in Congress. There is even the threat of keeping senators in session through the Fourth of July holiday next week. (There would definitely be a firework show!)

A few highlights include:

• First-time homebuyer tax credit: This credit would be granted to first time homebuyers who purchase unoccupied homes. These homebuyers could receive a 10% tax credit of the home’s value (up to $8,000).
• Rescue Refinancing: This plan would enable qualified borrowers to work with their lenders to refinance into a federal insured mortgage with a 30-year fixed rate. There is discussion that the lender would have to agree to reduce the principal balance down to 85% of the home’s market value in efforts of avoiding additional foreclosures.
• Fannie Mae and Freddie Mac Loan Limits: This bill would increase the loan limits from $417,000 to $625,000 permanently. (Currently these limits are only in place until December 2008.)
• Affordable Housing Trust Fund: This fund would be established to cover expenses related to the foreclosure rescue plan. This fund ($500 million to $900 million) would be funded by fees collected from Fannie Mae and Freddie Mac.
• Counseling Fund Expanded by $150 million: This would allow buyer’s to receive more counseling/education up front to avoid foreclosures and also so that borrowers in adjustable rate mortgages (ARMs) would have it disclosed what their future payments could look like in real dollar amounts ($$) instead of simple percentages( %%).

No one is in denial that there is a housing and credit crisis. Something has to be done both to respond and prevent these things from happening… but two major questions still remain: Who is going to pay for it all and will this be the turning point we’ve all been hoping for?

I like Shailesh’s simple answer to who is going to be stuck with the bill…

Are we really going to do this to our children?

Other Interesting Posts

• FHA Reverse Mortgage Counseling: What To Expect
• Is Your Landlord In Foreclosure?
• Arizona Loan Officer Prohibited Acts
• FHA Streamline Refinancing: Is A Local Arizona Loan Officer Better?