The impact will also be felt by first-time home buyers, who ordinarily would not even think of buying a home, or do it but on a collision course towards bankruptcy. The real estate market might suddenly find itself populated by more affordable housings in need of a quick sale; demand would be there to meet the increased offer. In other words, the economy will be flowing.

Who exactly does it apply to?

The temporary changes to the 1986 code concerns a mortgage used to buy a principal-residence home, and mortgage debt forgiven during the designated 3-year period. The home must have lost significant value, and the financial situation of the owner must be within the qualifying range.

In addition to help with mortgage relief, the Act also contains measures to help specific home owners more susceptible to financial doom. A surviving spouse will be allowed to shield up to $500,000 from the sale of joint property within two years following the death of the other spouse. Also, certain single parents who are full-time students will be given access to low-income housing, providing that their children do not receive exterior support. And volunteers from emergency-response services, like firefighting of medical units, will be allowed to shield local benefits derived from their services.

All said and done, the Mortgage Forgiveness Debt Relief Act of 2007 is expected to affect over 300,000 Americans struggling to keep a roof over their heads, with a 3-year window to revise, reconsider and re-negotiate.

Now, about that money printing idea...

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