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How the housing deal will help you

Published: Thursday, Feb. 16 2012 2:22 p.m. MST

Teresa McElprang poses for a portrait in front of her home in South Jordan on Friday, Feb. 10, 2012. She and her family are struggling to keep their home.

Kristin Murphy, Deseret News

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The recent housing deal will help troubled homeowners adjust their mortgages and avoid foreclosure but it won't fix everything, according to Reuters.

People who have already been foreclosed on their homes could receive payments between $1,500 and $2,000, according to Reuters. Troubled homeowners should be proactive to ensure their problems are addressed swiftly, even though the settlements says mortgage servicers are supposed reach out to homeowners.

"People can't wait, they need to act," Alys Cohen, a staff attorney with the National Law Consumer Center, an advocacy group, told Reurters. Borrowers have to modify their mortgages by the end of 2012 to qualify for the tax break.

Borrowers should note that unless their mortgages are serviced by one of the five banks named in the settlement, they will have to wait for later agreements expected with other lenders.

Troubled homeowners shouldn't expect the help to come quickly, as the agreement calls for mortgage servicers to reach out in six to nine months, and the process has been allotted three years to work, according to Reuters. Also, homeowners with mortgages backed by Freddy Mac and Fanny Mae will not qualify for reductions that are part of the deal.

The deal was designed to specifically help homeowners who have stopped making their mortgage payments and who owe more than their homes are worth.

Click to read the full article at Reuters.com

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