New mortgage-aid program hopes to save dreams

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The economy has more Utahns facing the prospect of losing their homes. Some with subprime mortgages are struggling to make their loan payments, but help is on the way.

President Bush signed a bill this summer that could help homeowners avoid the road to foreclosure. For those who qualify, it'll be a "Dream Saver."

New mortgage-aid program hopes to save dreams

Adjustable-rate mortgages (ARMs) can be a gamble because interest rates change periodically. Danny Anderson, who's currently looking for a house, doesn't like the idea of an ARM.

"It's really risky, and I've seen and heard of a lot of people lose their homes over it," Anderson said.

But a new program can help homeowners in that situation. The "DreamSaver" Program will help more than 500 Utah households refinance from an ARM to a fixed-rate mortgage. It's part of the Housing and Economic Recovery Act of 2008.

The bill allows the Utah Housing Corporation to purchase loans from lenders and offer mortgages at lower rates. The program will mostly apply to low- to moderate-income families.

Take, for example, a couple living along the Wasatch Front with a gross household income of $70,000 and a $250,000 mortgage. If they got an ARM at 6 percent, which increased to 8 percent, that's a 33 percent increase in their loan payment.

William Erickson, president of the Utah Housing Corporation
William Erickson, president of the Utah Housing Corporation

The program would allow the couple to refinance the ARM for a 30-year fixed at the current rate of 6.23 percent.

"So, DreamSavers, the name applies to the American dream. We're here to save that, and we want to keep these people in their home," said William Erickson, president of the Utah Housing Corporation.

It's a program one woman believes is necessary, no matter who's to blame for the current situation.

"It's hurting the whole economy, because the houses are going to be empty and foreclosed on, and that's not helping anybody. It'd be better to have families in them that need them," Utah resident Gail Goleman said.

Homeowners can apply for the DreamSaver program now. To find out if you qualify, click the related link to the right of the story.


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