President Bush announced earlier this week that the government would step in and help some home owners to refinance their loans. They want to do this through FHA or the Federal Housing Authority. So how many people are affected by the potential adjusting loans? The government estimates that over 2 million home owners are near or facing foreclosure. So how does this help home owners in Long Beach California? Well first of all let's look at who, what, and how many are likely to get help.
- The government estimates that about 80,000 will be affected by this new change. That is a very small amount in comparison to what is outstanding in the market currently.
- They are going to help home owners refinance. Now they are helping those who currently can't get refinanced. This will mean your loan amount must be conforming or under $417,000 so home owners in long beach california may not get much help out of this program.
- The government will not be bailing lenders out or home owners out with cash or any type of subsidy at the moment.
- The biggest part of this plan is that President Bush is trying to get the IRS to not tax home owners on the debt relief. Currently if you are working to avoid foreclosure through a short sale or in foreclosure the lender can and probably will issue you a 1099 for the amount that they lost on the sale of the property. This means you will owe taxes on that amount. In some cases that number can be astronomical. This would allow people to work more closely with the lenders and with less fear.
If you want to avoid foreclosure today make sure that you call your lender and ask for a short sale packet or that you ask to speak to the loss mitigation department.
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