We are publishing an older blog because our readers should keep in mind the help the government is giving is not to the people who owned two or more homes. After December 1, 2008 you can contact your lender. Such companies as Loan America have already placed big notices on TV and the Net. They have advised this author that if you qualify, the government will buy out your high mortgage (assuming you are up-side-down in your mortgage) and let you refinance without closing costs.
(“Upside-down means the value of your house has dropped so much that you owe more than it’s currently worth.”)
However, you must qualify. That means you must demonstrate that you would have the income to pay off the new mortgage. Also, if approved you must remain in your home five years following the refinance deal. That is to avoid what happened before, when everyone waited two years to take advantage of no capital gains taxes on the increase, then hoped to drop their house onto the market.
A loud, long, heavy thud hit the market at once, driving down prices, plumeting us into this housing mess. The five-year provision should end the house-hopping and stabilize the market, keeping owners in their homes long enough for the economy to improve. Stay tuned for further details as they are released. Don White