According to an article in the Dallas Morning News, the Federal Reserve is taking steps to help homeowners facing foreclosures save their homes.
Under the Federal Reserve program, qualified homeowners facing foreclosure will be provided several options to avoid foreclosure such as:
- lowering the principal amount owed on the mortgage
- reducing the interest rate on the mortgage
- lengthening the term of the mortgage loan (i.e. 45 years instead of 30 years)
Borrowers facing foreclosure who apply for the Federal Reserve foreclosure program must be at least 60 days delinquent to qualify for help.
The article went on to quote the Federal Reserve Chairman:
"The goal of the policy is to avoid preventable foreclosures on residential mortgage assets that are held, owned or controlled by a Federal Reserve Bank," Fed Chairman Ben Bernanke wrote in a letter Tuesday to Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee.
Haven't we danced this dance before? How long will it take for our lawmakers and businessmen to understand that the voluntary mortgage loan modification process is not working to stem the tide of foreclosures. Waiting until homeowners are 60 days delinquent to help them avoid foreclosure is not a good policy in "prevention of foreclosures."
After 60 days of battling foreclosure, a homeowner has a lot more financial worries than just his/her home. Many homeowners end up filing bankruptcy or losing their home to foreclosure AFTER they've gone through the bank sanctioned loan modification process.
We need lawmakers to back legislation that will allow homeowners facing foreclosure to modify their toxic mortgages in bankruptcy while they get a fresh financial start by discharging debt that has completely overwhelmed them.
If you are behind on your mortgage and facing foreclosure don't wait until it's too late to save your home and other assets. Take action as soon as you realize that foreclosure is most likely inevitable and speak to a Dallas- Fort Worth bankruptcy attorney today about your bankruptcy options.