The housing crisis hit California hard over the last few years. It was recently reported that the California lawmakers have voted to enact the Mortgage Relief Act and not a moment too soon. The U. S. Government led the way with relief legislation and California followed. When the housing crisis happened, California was one of the most badly affected states. It is expected that over one hundred thousand California homeowners will be helped by this new legislation.

What does this act do? Previously, California residents were taxed income tax for any amount that was forgiven on their mortgage by the bank. This applied to mortgage adjustments, foreclosures, and short sales. This was a terrible problem for many homeowners that were already struggling to make ends meet.

According to this act, California homeowners no longer have to claim any amount of debt forgiven by a bank as income. This will be the case through 2012. The limits are up to five hundred thousand dollars and this applies to the primary residence only.

If you have already filed your income tax it is not too late to file a corrected tax return and don’t miss out on this new legislation. Simply get an amended return form and submit it. These changes will be applied to your taxes for the year. Check with a tax preparer for details.

California residents have suffered greatly from the housing crisis and economic downswing. The Mortgage Relief Act is exactly what these people need in order to have a chance to get back on their feet. This new legislation may be helpful to you. See the state website for details.

The most commonly used Michigan mortgages today are Michigan FHA loans and Michigan Rural Housing loans. FHA requires a 3.5% down payment compared to the required 10% down payment for conventional mortgages. Michigan Rural Housing still allows for zero down and is the only zero down option available unless you are a veteran (in which case you can qualify for a me Loan).

The Michigan Rural Housing loan is a favorite of mine if you do not have a large down payment, because it also does not have any monthly mortgage insurance (PMI), making the payment more affordable. The next best thing in my opinion if you do not have a large down payment would be a Michigan FHA loan, because it only requires the 3.5% down payment and has a low amount of monthly mortgage insurance once again making the payment more affordable.

These loans also have more flexible credit guidelines than conventional, still allowing a minimum credit score of only 620. But keep in mind, getting a loan approved today with past credit blemishes is no picnic. You will have to provide letters explaining any collections, bankruptcies, foreclosures or even late payments in the past 24 months. Make sure you are working with an experienced mortgage loan officer and an experienced company so you can feel confident that your transaction will closes.