In order to help stem the foreclosure crisis, the Federal Housing Administration would be allowed to insure up to $300 billion in new loans for at risk borrowers if the lender agrees to forgive current mortgage balances that are more than 90 percent of the current home value. The 10 percent of equity, on the new FHA loan, would be given to the homeowner and must be shared with the government when the homeowner refinances or sells the home.

“The passage of this bipartisan legislation marks tremendous progress in my ongoing effort to help stabilize our markets and provide relief to hundreds of thousands of Americans who, due to no fault of their own, are struggling to keep their homes,” said Senator Chris Dodd.

The new Senat act on mortgage also provides for stricter oversight of Fannie Mae and Freddie Mac who guarantee the purchase and sale of home mortgages on the secondary market. A stricter oversight is needed as both of these government sponsored enterprises saw steep first quarter losses as well as accounting scandals in the past.

David Palombi,Freddie Mac's SVP Corporate Marketing and Communications released this statement ""We support legislation and the work of the committee. We would stress, however, that if not applied carefully the bill could adversely impact the mortgage market. Specifically, it is essential that we achieve a proper statutory balance between capital levels and our responsibility both for funding long-term fixed rate mortgages – something no other country has – and providing stability to the U.S. housing market. We look forward to working with the Senate and House on these issues as the process continues."

For more details on this mortgage aid programs visit Future Planning Financial at www.fpf-direct.com.