Congressman Sherman: Report on Home Mortgages and Property Values
Keeping Affordable Home Mortgages Available
Under a new provision championed by Congressman Sherman, those buying or refinancing a home in the Valley will be eligible for an FHA-insured mortgage of up to $729,750. FHA loans offer a lower down payment and a much lower interest rate. It also increases the likelihood that someone buying a home will get approved for a loan, and that those trying to sell their home will find an eligible buyer. Without this provision we would have seen another sudden decline in Valley home prices, severely harming the Valley economy.
The increased limits do not require a dime of additional spending by the federal government. The FHA operates entirely from its self-generated income and costs the taxpayers nothing.
Protecting the Mortgage Interest Deduction
Congressman Sherman strongly supports preserving the current tax deduction for mortgage interest. Various tax proposals to eliminate this critical deduction would saddle middle-class Californians with a huge tax increase, and could cause home prices to fall even further -- a disaster for the Valley economy. The home mortgage deduction provides benefits for everyone by spurring economic activity. A change in tax laws that undercuts home values hurts all residents, including senior citizens whose equity in their homes is critical to retirement plans. Congressman Sherman will continue working to ensure this deduction is preserved.
Refinancing at Lower Rates for Those with Low Equity (or No Equity)
Mortgage rates are at historic lows and many homeowners want to refinance to reduce their monthly payments by hundreds or even thousands of dollars. But many homeowners do not have the 20 percent equity required to refinance, and some owe more than the current value of their home.
Congressman Sherman cosponsored the HOME Act which allows those with mortgages owned or guaranteed by Fannie Mae and Freddie Mac to refinance – even if they owe more than their home is currently worth. Even if you write your check to a major bank, your mortgage is probably owned or guaranteed by Fannie Mae or Freddie Mac.
This provision will help create jobs in the San Fernando Valley. Homeowners who save hundreds of dollars each month are good customers for local Valley businesses. Furthermore, it does not expose the federal government to additional risk because these mortgages are already guaranteed or owned by Fannie Mae or Freddie Mac.
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Mortgage Modification for those Facing Hardship
Congressman Sherman helped create the HAMP program to help those having significant difficultly making their mortgage payments. The goal is to reduce foreclosures, which are a tragedy for the families involved, and adversely affect the neighborhood. Qualifying homeowners often have their payments reduced to 31 percent of their monthly pre-tax income.
For help finding out if you’re eligible for a lower payment under these new policies, you can contact our Valley office at (818) 501-9200.
You can find out if your mortgage is owned by Fannie or Freddie by going online to:
For more information you can also visit: http://www.makinghomeaffordable.gov/