Mortgage Help

President Bush announced several initiatives today designed to help homeowners avoid foreclosure.

First, the Federal Housing Administration (FHA) would be modernized, allowing lower downpayments and larger loan amounts from the FHA.

Second, the President called on Congress to change the tax code so that homeowners forced to sell their homes for less than they are worth are not forced to pay tax on the forgiven mortgage amount.  Currently, this forgiven loan amount is taxed as  income.

Third, the administration will work with outside groups to help provide additional refinancing alternatives to homeowners facing foreclosure.

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