Are Obama’s Federal Loan Modification and Refinance Programs Right For You?

Are Obama’s Federal Loan Modification and Refinance Programs Right For You?In addition to high unemployment and other negative factors of the same can not be ignored: the floating mortgage interest rates rise, buyers for the first time the federal government provided preferential tax policies expiring by the end of November this year. Began the current round of financial crisis, the U.S. housing market crisis in the sub-loan, the housing market is the United States on the Verge of a microcosm of the economic situation. A certain extent, the housing market recovery is substantial improvement in the U.S. economy an important symbol, and the fundamental improvement in the housing market depends on employment, consumption, economic indicators such as the warmer the better.

President Obama has presented two new federal programs aimed at keeping homeowners in their homes.

The first program is the “Home Affordable Refinance Plan”. This option is directed to homeowners who have thus far been able to make their mortgage payments, but who are unable to refinance their mortgages because their homes have become “upside-down”. In other words, because of drastically falling home prices, they now owe more on their mortgages than the present value of their home. The “Home Affordable Refinance Plan” is a federally subsidized program to allow mortgage refinancing for 15 or 30 year terms. Refinancing is subject to current interest rates, and closing costs apply. It is specially focused toward homeowners facing higher mortgage payments due to adjustable rate mortgages, as this plan offers a fixed rate mortgage.

The following requirements will determine if you are eligible for this program:

You were not more than 30 days late in paying your mortgage payments for the past year.

The property to be refinanced must be your primary residence.

Only loans written under Freddie Mac or Fannie Mae are eligible.

The present balance of your mortgage cannot be more than 105% of the home’s present value.

Proof of earnings or other income must be provided to show that you are financially able to make the refinanced mortgage payments. You should keep in mind that if your present mortgage has a low-rate negative amortization option, or if your payments are applied to interest only and not to principal, your new payments under this plan could actually increase.

The mortgage must be a first mortgage, or trust deed. If there is a second lender in place, it must agree to subordinate its interests after the refinanced first mortgage.

The President’s second plan is the “Home Affordable Loan Modification Plan”. This is available for all mortgages, not just those serviced by Freddie Mac or Fannie Mae. You must meet the following requirements to be eligible for this plan:

The mortgage you are seeking to modify must be on your primary residence.

The principal balance on your mortgage cannot exceed $727,750.00. (This figure is based on a single unit dwelling; there are higher limits for two to four unit dwellings).

Your mortgage must have been in place prior to January 1, 2009.

Your current mortgage payment, including taxes and insurance, must be more than 31% of your gross monthly income.

You must prove a financial hardship under your present mortgage.

You can qualify for this plan even if you are not delinquent on your payments, as long as you can show that circumstances are likely to cause delinquent payments in the future. You may find that your lender will be receptive to this plan, since lenders receive incentive payments from the Treasury Department for every qualified loan they approve. Your lender will provide an application which you must complete and submit, together with current financial documentation. Be sure your information is accurate, since this is what your lender will be basing its decision on. Possible modifications that your lender can make are reduced interest rates and extension of the mortgage term, both of which will serve to reduce your monthly payments.

Most homeowners with mortgages will find they qualify for at least one of these plans. Investigating them and speaking with your mortgage lender is the first step toward keeping your home!

Are Obama’s Federal Loan Modification and Refinance Programs Right For You?Some analysts pointed out that despite the U.S. economic performance in the second quarter this year, slightly better than expected, housing markets there were some positive signs of the corresponding, but cold in the overall economic situation in the context of the housing market to make overly optimistic estimates is still too early.

Relate post:how does refinancing work Payday Loan Home Equity Loans when to refinance rule of thumb