It’s long been rumored that the Obama Administration would be developing a plan to help homeowners that are facing financial hardship. In early March, the “Making Home Affordable” plan was announced. The original details about the program were a bit sketchy and hard to follow, but there are now some more concrete details released about how the program will help consumers that can no longer afford to pay for their mortgages.
The “Making Home Affordable” plan has to primary components. The first is offering the ability for some homeowners to refinance to conventional, fixed-rate loans. To qualify for this program, an individual’s mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac. The consumer also has to owe more on the value of the home than it is actually worth. You do not necessarily need to be behind on your mortgage to qualify for this part of the program.
If you believe you would qualify for the refinance program, you can head to the MakingHomeAffordable.gov website and fill out the “Home Affordable Refinance” eligibility survey and receive further instructions about how to begin the process. Essentially, they will tell you to contact your mortgage lender or servicer and request an application to begin this process.
The other aspect of the “Making Home Affordable” plan has to do with setting consumers up with loan modifications if they are behind on their homes. Consumers that owe less than $759,750 on their homes and are behind on their payments have the opportunity to get their loan payments reduced to 31% of their monthly take-home pay. In this case, some that participate in the program will have their mortgage loan interest rates may drop to as low as 2.0% for the next few years. There’s also an eligibility survey for the “Home Affordable Modifications” program as well. Lenders are required to participate in the program, so if you haven’t had luck with the “Hope Now Alliance” or working with your mortgage lender before, you now may be able to get something setup.
The federal government is pumping over $750 billion (remember when that used to be a big dollar amount?) into this program to help get the real-estate market back to a period of growth, on top of the additional bailout money, the money being pumped into the credit market, the stimulus package, and the original TARP funds. With all of this money being pumped into the real estate market, especially related to the funds buying mortgage backed securities, it’s likely that rates will drop below 4.00% within the next few months, so if you have a mortgage loan rate of 5.625% or more, you are definitely a candidate for a refinance.
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1 users resposed " President Obama’s “Making Home Affordable” Plan Explained "
September 9 2009
homes are anything but affordable!!!!!!! due to decrease in finance and my husbands health and disabality we fell behind in our 1,510.00 house payments. After going around with Chase Bank and finally F H A all we have been offered is 800.00 payments for 3 months and after that starting in December our payments will be 1,475.oo. A decrease of $35.00 off the orrigional payments. yet you push for socialized medicine giving all illegials free medical and end of life counciling for seniors.as well as other items to numerous to mention. Hitler did genecide and you are too. You have done everything to bail out large corportions and to hell with the American people. Obama you are Marxist permoting a socialist system. My mother is 83 years are you going to kill her with your end of life counciling and how about my disabled 68 year old husband? of course we will be homeless. But you are to busy giving billions to your friends.
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