THIS IS GREAT NEWS FOR TWO REASONS:

1. The current homeowner is relieved of a staggering and depressive tax obligation possibility, given a way to sell the home for less than owed on it and avoids a foreclosure on the home owner's record.

2. Because the bank has taken the property back in its Real Estate Owned (REO) department it is very motivated to get rid of the property as quick as possible to avoid holding it and suffering a further loss as well as bank regulation demerits that a bank suffers when property is taken back after a mortgage failure. How Does This Help A First Time Home Buyer? It helps the first time home buyer in many ways. The definition of a first time home buyer is anyone who has not owned a home within the last three years prior to obtaining a mortgage on their principle residence.

The Mortgage Forgiveness Debt Relief Act of 2007 will increase short sales of homes that homeowners cannot afford and now know they cannot be held liable for any "debt forgiveness" tax. Sellers who are forced into foreclosure will have more flexibility in negotiating with the mortgage holding bank and the buyer who makes an offer to purchase the property. Since the property value is now very low it is an excellent time for a buyer to buy the property and lock in the interest rate at a fixed amount that the buyer can afford. A 30-40 fixed interest rate should be obtained. There are plenty of them available. The bank is inclined to work with the buyer in order to get rid of the unwanted inventory.

Remember banks are in the lending business, not the real estate business. They cannot make money unless loans are made. If they hold on to the real estate as inventory they don't make money. In fact they lose even more money because the home is now vacant, subject to vandalism and the maintenance and upkeep does not stop. The bank also has to hire a property management company to oversee the property. Get the picture. The bank does not want the property. It wants to sell it. This is great for a first time home buyer. He/she can get a great low market buy, locked in with a long term mortgage rate that they know they can afford before going into the loan and best of all when the real estate industry rebounds, which it surely will, the buyer will reap the benefits of increased value appreciation that helps to build a solid estate.

The first time home buyer can also use one or more of several down payment assistance programs that will help with the down payment on the property purchase. This is money that never has to be repaid. There are several local, state and federal programs available. Down payment assistance up to $50,000 or more is possible. Now is the time to Stop Making Your Landlord Rich!! and own your own home. Hope this helps somebody go out and make their dream of home ownership come true.

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