The President just signed into law the Housing and Economic Recovery Act of 2008. Las Vegas home owners that we are working with that need to get out from their mortgages due to hardships and now have homes where they owe more then they are worth have been asking several questions since we do specialize in Las Vegas short sales. More specifically, if the new bill is going to give them the ability to have a lower mortgage payment and still be able to stay in their Las Vegas Home.

Obviously, a 600+ page bill is going to take a little bit to get through to give you the right answers and Attorneys we know are busy going over and letting us know what the main details are… and more specifically, how this bill matters to us as Las Vegas real estate professionals. More to come but one of our Preferred Lenders did forward this information to us concerning new regulations, loan limits, tax credits for first time Las Vegas Home Buyers. Without going into detail concerning all of those new changes, the big question has been, Will the New Law Help the Las Vegas Home Owner that needs to get out from under their mortgage, but owe more then the home is worth? (Or at least be able to lower their monthly mortgage payments to something they can afford.)

Below is information that was passed on to us from one of our preferred lenders that deals specifically with this topic since for Las Vegas Home owners, this is the primary concern right now.

Housing & Economic Recovery Act of 2008 ~ Product Related Highlights 

 

Yesterday, the President signed into law a sweeping housing bill (H.R. 3221) which includes, among other topics, reform of government sponsored enterprise (GSE) regulation and modernizing the Federal Housing Administration (FHA). 

FHA “HOPE for Homeowners Program” 

 

Hope for Homeowners is a new FHA program that allows at-risk borrowers to refinance their current loan to avoid foreclosure. While this program has yet to be finalized, the following provides a high level overview in the event you receive questions:

• The new loan must be the lesser of 90% of the current value of the home or the amount the borrower can afford to pay (as determined by the current requirements of FHA). 

• New loan must be a 30-year fixed rate mortgage. 

• The homeowner must provide evidence that they are unable to afford their current mortgage payments. 

• The borrowers would be required to share the equity and any appreciation equally with HUD upon sale or refinance of the home. 

• The borrower must certify that they have not intentionally defaulted on their mortgage and have not knowingly provided false information for the purpose of obtaining a mortgage. 

• As of March 1, 2008, the borrower’s debt to income must be greater than 31%. 

• The subject property must be the property’s primary residence and the only one in which they have an ownership interest.

It is important to understand that HUD must still establish the specific regulations for this program and follow the Administrative Procedure Act for implementation. This requires the proposed regulations be published with a comment period that must commence before finalization. This process will take time and is not anticipated before year’s end.

More to come and more to share. It’s going to be a long working weekend as we dig into the new law and figure out how it really is going to help Las Vegas home owners. We always want our Las Vegas home sellers to know all of their options/alternatives to foreclosure and have the RIGHT information.

I’ll be visiting blogs of experts in this field and sharing their opinions concerning this new bill so there will be plenty to follow.

Paul Francis, CRS
Las Vegas Real Estate
702.592.3058

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