December 21, 2007 - No taxes will be due by homeowners who have mortgage debt written off either through a renegotiation of their loan or a foreclosure. Previously, mortgage debts written off have been taxable by the IRS.

This was signed into law by President Bush yesterday.

This law does not help homeowners who are current on their payments or who refinance (the vast majority of homeowners).

If your payments have or will soon rise, get the process rolling before the end of 2007 because:
- Home values are expected to fall by 4.5% in 2008 (source: Fannie Mae). The less equity you have, the harder to refinance your payment.
- Foreclosures rose 68% in November 2007 (source: RealtyTrac). This is adding to the glut of homes on the market, further reducing prices.
- Tough new rules on refinancing start next year. If you can’t meet the new requirements, you won’t be able to refinance.

The group of lenders is willing to give you a new payment amount as soon as today.

The government announced a payment freeze for homeowners whose payments have or will soon reset to sharply higher rates. This was announced by President Bush on December 6, 2007. 

Your payments can be frozen for 5 years at your low, teaser rate if you meet these qualifications:

1) Your credit score must have been below 660 when you got your loan and your score must not have improved more than 10% since then.
2) You cannot have been more than 90 days late on your payment in the last year.
3) The equity in your house must be less than 3%. Example: If your house is worth $100,000, and you owe $90,000, you’ve got 10% equity and you don’t qualify for a payment freeze.
4) You must live in your home. You don’t rent it out.
5) Your payment must be going up more than 10%. If your payment is going up less than 10%, you don’t qualify.

Don’t meet qualifications for payment freeze?
If you don’t meet all 5 qualifications above, there is still good news. You can request easy refinancing from this group of lenders who may be able to give you a fixed rate, taking advantage of the 1% rate cut put through by the government.NOTE: With loan demand down, lenders are anxious for business. You may be able to simply refinance to a lower fixed rate.