Rescue Plan for a Troubled Housing Market?

According to a news report by CNN Money, the Senate has recently moved toward negotiating a bipartisan housing package that could provide relief for the current state of the housing market. These deals, however, are complex and take time, and Congress faces a deadline since 1.5 million subprime adjustable-rate mortgages will reset to higher interest rates this year and will result in a large amount of those borrowers becoming subject to foreclosure if they can’t afford their mortgage at this higher rate. These borrowers are also at risk of then losing their homes within three or four months if they are unable to work out a deal with their lender or find a way to meet payment. The most controversial provision of the recent Senate bill includes allowance for bankruptcy judges to write down the principal and interest on residential mortgages for Chapter 13 filers. This has been objected to by Republicans because it would increase mortgage costs at large, and it is uncertain yet whether Congress will be able to come to the rescue of borrowers in time.

For more information on this recent development, please visit: http://money.cnn.com