The recent government bailout has spawned a new program called Hope For Homeowners. This program is designed to help as many as 400,000 struggling home owners who are facing foreclosure. While this is good news for some home owners, there are certain conditions that must be met to qualify.

The home you wish to refinance must be your primary residence - rental properties and second homes don’t qualify. You can’t own another home either. The monthly mortgage payment must be at least 31% of your monthly income and you had to have obtained the mortgage on or before January 1, 2008.

The program is entirely voluntary for both the lenders and borrowers.

In order for the program to work, the lender must agree to refinance the delinquent mortgages into a 30 year fixed loan at 90% value of the current market price. The current market price will be determined by an FHA approved appraiser. It’s possible that the interest rate may not change, but monthly payments will be lower due to the lesser current market values. Homeowners that currently have adjustable rate mortgages (ARMS) will now have a fixed monthly payment for the life of the loan.

The homeowner would be responsible for any closing costs as well as an up-front payment of mortgage insurance. The FHA will insure the new mortgages.

The Hope for Homeowners program went into effect on October 1, 2008 and will remain available until September 11, 2011.

Since this is a voluntary program, it will take time to see if the mortgage lenders are willing to participate. They would receive an FHA insured mortgage in exchange for accepting the reduced 90% mortgage refinancing. The lenders may wish to explore other measures, such as loan extensions and reduced interest rates, before they agree to absorb the costs of the reduced mortgages.

When a property that is being rented faces a foreclosure (http://en.wikipedia.org/wiki/Foreclosure), many owners wonder if they can continue to collect rent from the tenants. Once the notice of foreclosure is received, some tenants may balk at the idea of paying rent to someone who they believe is no longer the owner of the property. However, until the foreclosure proceedings have been completed, the tenant is still required to pay rent.

A notice of a pending foreclosure is just what it appears to be: a notice. It simply means that foreclosure proceedings have begun. The property remains under its present ownership until it is sold at auction. Until that time, nothing has changed and tenants must follow the rules and regulations contained in the lease, including the timely payment of rent.

If a property owned by a landlord should face a foreclosure, the best thing the landlord can do is address the tenants directly. He should explain in no uncertain terms that he will legally remain the owner of the property until it is sold at auction. He should also let the tenants know that he does not plan to void the lease by allowing the property to fall into disrepair and that they still have the legal obligation to pay rent.

Of course, many mortgages contain what is called an “assignment of rents” from the borrower to the bank. This means that if you fall into foreclosure, you may be required to turn over all rents received to the bank. Before spending that rent money, you should review your loan documents carefully to be sure that you are entitled to keep the money.

If you’re a great salesperson, have real estate contacts, or are part of a family tree where members die in the same city they were born… then the homebuyer tax credit is probably a nice break for you if you are considering buying your first home. However, taking advantage of the Housing and Economic Recovery Act’s first-time homebuyer tax credit may not be worth it to a number of people. The credit amount can be as high as $7,500 for homes purchased between April 9th, 2008 and July 1st, 2009, for first-time home buyers.

Some may not realize that there is still a catch in this case, and the “credit” is not actually “free money”… but rather acts more as a loan. The IRS will assume repayment over the next 15 years. The IRS, however, is not charging any interest, and the payment amount is divided equally among the years.

Aside from the attractiveness of paying off an instant benefit slowly over the course of many years (at zero interest,) making use of the credit may still be a bad decision. After all, it is arguable that people buying homes that they simply weren’t ready for was the cause of the housing crisis as it is today. Also, for those in the military, expanding companies, or in any other position or lifestyle that requires relocation in the next 15 years, the sale of the home will throw a wrench into your repayment plans. The law requires that the entire amount of the loan becomes due following the sale of the home.

So, unless you are confident you can sell a home for more than the purchase price, in this market, or are sure you would be residing in it for the next 15 years, you should think long before acting on the homebuyer tax credit availability.