According to an article in the Star-Telegram, Congress sent the president legislation designed to prevent foreclosure. Legislators hope that "Helping Families Save Their Homes Act" will encourage lenders to modify the mortgages of homeowners facing foreclosure.
The article said:
The bill would expand an existing $300 billion program that encourages lenders to write down an individual's mortgage if the homeowner agrees to pay an insurance premium. The program, set to expire in 2011, would swap out a homeowner's high-interest rate for a 30-year fixed loan backed by the Federal Housing Administration.
If passed into law the legislation would also expand eligibility for the program. Because of strict eligibility requirements and the reluctance of mortgage lenders to participate, only about 50 homeowners received refinancing/modification under a program that claimed it would help 400,000 homeowners facing foreclosure.
Although I hope that homeowners can avoid foreclosure by using this new program, it would have been more effective if Congress had given bankruptcy courts the power to modify these toxic mortgages. As it stands, we're still depending on the very mortgage lenders who had a hand in creating the foreclosure crisis to step in and prevent it.
The fact that only 50 homeowners out of 400,000 benefited from the last foreclosure prevention program is not only due to the strict eligibility requirements, it is due to the mortgage industries lack of incentive to really step up their efforts to prevent foreclosure. For those homeowners facing foreclosure who fail to find help with these programs, bankruptcy can help you avoid foreclosure . Please contact a bankruptcy attorney to find out how bankruptcy can help you prevent foreclosure and save your home.