Mortgage fix - Its time to act

The senate has agreed on working together to develop a package to help deal the foreclosure issue. It was indeed a surprise move where both Republicans and Democrats leaders agreed to find a common solution. But, the time is short and so, the senate needs to work fast to use this deal for the benefit of homeowners. According to housing experts, the bill should be signed into law before July and should come into effect in the third quarter of the year, so as to help in preventing foreclosure.Almost 1.5 million subprime adjustable-rate mortgages (ARM) are going to reset to higher rates this year. Most of such reset will happen in May and June.  In such a situation, homeowners may not be able to pay the monthly payments because it will increase the payments to a very high amount.  Some of the homeowners are already having problem in paying the mortgage.

In general, if a homeowner defaults for 90 days, then he get a foreclosure filing notice. He needs to work out a deal with the lender within 3-4 months to save his home. So if your loan is reset in May or June, then it may land up in foreclosure in September and you may lose it by end of the year.  

This bipartisan Senate housing package, need to be put in place so as to ensure that another massive sub prime mortgage problem does not occur in the country. Both the parties are showing their interest, though the reason may be next election pressure.