At the end of last month, I was happy to learn, the much-talked-of housing bill was passed by Congress. As a bankruptcy lawyer in Indiana for more than twenty years, I deal every day with the issue of foreclosure. As I brought out in Keeping Home Sweet Home – It Depends, for some clients who simply bought “too much house”, it might make sense for them to lose their home and downsize, perhaps arriving at a compromise with their lender to accept a “deed in lieu of foreclosure” or doing a “short sale”. For other clients (those with children for whom it’s important to stay within a certain school district, for example), it’s better to make every effort to preserve their present home.

This new bill does several things, and I’ll mention just three of the big ones here:
a) It provides the Federal Housing Administration with $300 billion to go towards offering fixed rate mortgages to debt-ridden homeowners. b) It offers tax breaks to first time home buyers, including low-income buyers. c) It gives states $11 billion in tax-free bond backing to make low interest loans, to build low income rental housing, and to refinance subprime mortgages.

Bankruptcy and foreclosure are closely related, and on both, I always advise asking for professional help at the first signs of trouble. The new housing bill, particularly in light of the fact that President Bush dropped his earlier opposition to it, means problems are being addressed. And that’s been the core of my work for the past twenty-plus years – addressing problems head-on, helping clients create a strategy, and helping them begin the process of making a fresh financial start.