How a Housing Bill Could Help Struggling Middle Class Homeowners, Perhaps Even You

The Basics You Need to Know Now when it Come to the Impact on Your Home Mortages, Foreclosure Risk and More

President Bush is reportedly about to sign a housing bill package (also known as a housing rescue package by some) designed to give homeowners much needed relief and..yes...potential rescue from the very real risk of losing their homes. Many factors have led up to this crisis (see sources at end of article), including a near perfect storm of economic hits to the average middle class household, not all of them related to housing. When homeowners are also buffeted by rising gas and food prices as well as higher unemployment rates, things can get very tough...very, very quickly.

This turnaround and decision to sign the bill is something surprising, considering that some White House media reports indicated that the FHA program would be too much of a burden for the government . However, Treasury Secretary,Henry M. Paulson, was a key player in helping to get the deal done, especially with financial props for Fannie Mae and Freddie Mac (who own or help back up an estimated $5.2 trillion in mortgages) . Both Fannie Mae and Freddie Mac have had their own financial issues.

Why the Housing Bill is needed now and its impact on many middle class homeowners

First of all, many Americans are watching their incomes lose value, go down or sag just as they are faced with higher costs in many other areas. Even before taking into account the housing crisis - a significant number of people are feeling a deep financial pinch. How deep? Adjusted for inflation, median income per household dropped by $1,175 dollars between 2000 and 2007.

At the same time, the average family, according to some reports, is spending a staggering $4,655 more on rising basics such as gas, medical care and....yes, housing costs. Unemployment figures are at record levels in many areas of the country. Home foreclosures are up by as much as 56% and many are turning to their home equity loans and even credit cards to pay their mortgages, digging an even deeper hole in their savings and raising their debt amounts.