If you think it can't happen to you--think again. It's happening to celebrities. In fact, 1 in 11 mortgages are in trouble. That's a lot of Americans. The state of housing is the worst in 3 decades. What makes it so frightening is that many of those families in trouble are having to choose between driving or keeping their homes. Homeowners are having to make extremely difficult choices. This fact is reflected in skyrocketing bankruptcies.
The Congress is proposing legislation that might help. But that might not come anytime soon:
The Bush administration has taken steps to help distressed homeowners. It has urged lenders to freeze rates for some homeowners and encouraged lenders to rework mortgage terms so troubled borrowers can stay in their homes.That problem is that it might be too little too late. America is drowning in debt and might not have the resources to pay for the most basic necessities much less a mortgage.
A congressional plan that includes a foreclosure prevention program has stalled as lawmakers figure out how to pay for it.
The government would back as much as $300 billion in new loans to help certain borrowers refinance into cheaper, fixed-rate loans. Mortgage holders would have to agree to take a substantial loss on the existing loans; borrowers would have to show they could afford the new mortgage and share future proceeds with the government.
The House passed its version last month. Senate leaders say they want to vote by July.