According to news reports Congress is close to a $700 billion mortgage market bailout plan that will be ready to go to the floor of the House on Monday. It is a compromise measure that both political candidates appear willing to support, and it appears to have enough Congressional support to pass.

The first reports give these details. The plan tentatively includes:

1. A $250 billion initial authorization and $100 billion more that the President can spend if needed. An additional $350 billion will require more negotiation with Congress before it can be spent.

2. No golden parachutes for executives of companies that partake in bailout funds.

3. The government can choose to insure some of the bad mortgages rather than buy them.

4. The government can decide to accept stock warrants from beleagered banks who participate in bailout as a way of taking an equity stake in the eventual recovery.

5. Mortgage lenders will need to first try to negotiate with troubled homeowners to lower payments in lieu of foreclosure.

6.  In 5 years, if sale of the problem assets is not complete, the government will need to propose a new plan for disposal of the bad assets.

It appears that this plan has more oversight and equity-building options built in than the original Bush Administration plan. It seems to have bipartisan support now, including the support of the two presidential candidates.

How will it impact homeowners who are in foreclosure trouble?  Well, it appears that homeowners who have received the cold shoulder from their lenders in the past, will get a second opportunity from many of these lenders to discuss lower payments and other modifications that may make it easier to Avoid foreclosure and/or bankruptcy.

Perhaps the bailout will spell an end to the precipitous slide in housing prices that have ruined many local real estate markets because there will be fewer new foreclosures and less pressure to continually cut prices in order to sell. Banks may no longer have as much incentive to accept rock bottom short sale prices as they will have other options available for getting rid of bad property.

Certainly there will be pressure to increase taxes to pay for the bailout. But the negatives of higher taxes should be less onerous than the catastrophic results of a frozen economy that will make it impossible for many to borrow, drive many companies out of business, cost tens of thousands of jobs, and further fuel foreclosures.

I know that my good friend and real estate coach, Matt Gillogly, is in favor of letting the chips fall where they may with the banking industry and, like most of the callers into Congressional offices this week, is opposed to the bailout.  For Matt’s viewpoint on the matter, see  his blog at Createtrueriches.com.  In theory, I agree, a bailout is a terrible idea.

However, these are terrible times, and there is historical precedent to show that a short term fix of this time can work to make a recession shorter and less painful.  That is a recipe that this economy needs right now.

Liz Nichols

ednenterprises (at) gmail.com

For many months now I’ve been monitoring the offerings at Clickbank, the world’s largest repository of downloadable books, to see if there was anything that would help the average homeowner. There was nothing–except for material on how to buy a foreclosure meant for investors. I decided to write the definitive guide to foreclosure help for homeowners.

It’s called “Understanding Foreclosure,” and you can get the downloadable version instantly at:

http://www.understanding-foreclosure.com. This 60+ page guide helps homeowners who are in danger of losing their homes or investment properties an easy to read, step-by-step checklist of what to do to Avoid foreclosure, and what to do after it happens if the worst case scenario cannot be avoided.

There is good news on the horizon about shoring up Freddie Mac and Fannie Mae, so banks may be even more willing to negotiate refinance and other workout terms. Now is a great time to get armed with the information you need to make the best choices for your future. This guide will help you make those choices in a logical, informed manner.

Just in the last few weeks a couple additional guides have come on the marketplace. The difference is, Understanding foreclosure is written by someone who has been in your shoes, if you are a homeowner who is hurting. In fact, we’re still not out of the woods. I got educated in order to save myself, and now I am trying to help others as well. My guide will lead you to other free and small fee sources that will help as well.

Get Foreclosure help today at: http://www.understanding-foreclosure.com.

Liz Nichols

support@understanding-foreclosure.com

http://www.understanding-foreclosure.com

I was talking with our financial analyst the other day. His company, Ameriprise, has one of the more pessimistic forecasts out there on when the turnaround will happen.  They predict that we won’t be back to the October 2007 stock market levels until January 2010, but that once we hit that mark, we’ll be on a new surge that will be long-term and rapid.  He admitted that the analysis came out before the Feds decided to take over Fannie Mae and Freddie Mac.

Some analysts feel that the improvement in the housing market will occur mid-year in 2009 following a couple quarters’ drop in the stock of housing on the market.  Hopefully, with Freddie and Fannie able to help more home owners in distress, we will see a quicker end to the slide in housing prices and the increase in days on market because there will be fewer emergency sales due to foreclosure.

Now, according to the latest AP news story, Senators Sherrod Brown of Ohio, Bob Casey of Pennsylvania, Bob Menendez of New Jersey and Charles Schumer of New York are urging James Lockhart of the Federal Housing Finance Agency to do everything in his power to put a 90 day freeze on foreclosure and to approve as many refinanced loans for people who are late with payments as possible.

The article goes on to say that these Senators encourage Freddie and Fannie to follow the example of the Federal Deposit Insurance Corp., that has worked with IndyMac and other banks to negotiate with homeowners in default to switch loans to a low fixed rate.

No one knows if these measures will have a bandaid effect, rather like the economic stimulus checks, or whether there will be genuine turn-around in the economic affairs of the country coming out of these measures to shore up our housing guarantee programs.

Let’s hope for the best, and for a turn-around that starts sooner rather than later!

Liz Nichols

support@foreclosurenewsblog.com