President BUSH offers aid to struggling homeowners

The rise in mortgage defaults and a slow economic market has caught the attention of top government officials including President Bush. Today the President announced several options under review to aid struggling homeowners.

One of the proposals offered by President Bush was to revamp the FHA program "which would permit lower down payments, allow FHA to insure bigger loans, and give it more pricing flexibility". Currently the FHA program insures loans up to $417,000.

In addition to revamping the FHA program the President offered a new program called FHA Secure. This program would help homeowners with good credit refinance their current mortgages to a more affordable loan.

Also, current tax laws treat the loss that a bank has when a property sells for less than what is owed as taxable income to the seller. President Bush is asking Congress to pass a bill that would provide "temporary relief" for these homeowners.

The Federal Reserve is also expected to help consumers by announcing at their September 18th meeting the reduction to its rate for overnight federal funds by at least a quarter point.

Picture above taken d by Chris Greenberg.