Help is on the Way!!!

Good news for former Washington Mutual loan holders:

Today, JP Morgan Chase, who recently bought WAMU in the largest bank failure in United States history, announced they will hault foreclosure proceedings for 90 days for eligible homeowners.

The move comes at a critical point in the housing sector and is a win-win for both struggling homeowners and banks. An estimated 400,000 homeowners could avoid foreclosure and stay in their homes by renegotiating interest rates and loan terms amounting to roughly $70 billion.

The programs will apply to people who live in their homes and have sub-prime mortgages, pay-option mortgages or negative amortization loans. The company said these loans could be changed to 30-year loans, fixed rate loans or even interest only loans, depending on each individual situation.

Look for other banks to follow suit:

With Chase setting the example, look for Bank of America who purchased Countrywide and Wells Fargo who bought Wachovia (both of which held high levels of bad sub-prime debts) to make similar programs available for their clients.

Keeping foreclosure rates low is a key step to stabilize the struggling real estate market and help the banks reduce their bad debts and reestablish good lending practices.

It's a step long overdue by the banks but will soon be certain to many, extremely necessary!