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Government assistance to refinance home loans

February 15th, 2011

Today is a special day for many people, the Government and banking institutions can’t make up their minds and the markets are out of control!

But, many people in debt and other financial stress face the various serious business of foreclosure on their homes. To prevent that from happening many will turn to refinancing home loans to bail them out of a bad situation.

One major problem is that there are many companies offering refinancing home loans, trying to cash in on the ever increasing refinancing home loans market, but not all these refinancing home loans actually benefit the emotionally and financially distressed homeowner who is on the brink of losing everything.

At this point in time, the financial lenders have dictated the terms of the refinancing home loans and homeowners, especially with limited resources and poor credit standings pretty much had to accept the terms regardless of how costly those terms would be.

Unfortunately, many homeowners are dealing with higher adjustable rates on their mortgages, but the value of their homes is not increasing. Often time since it is becoming increasingly difficult to sell homes in this market, the equity on the homes is decreasing. This makes refinancing home loans even more difficult resulting in heavy financial setbacks from having to use personal money to help refinance.

The US government will be intervening to help prevent the foreclosure epidemic from totally crippling the economy. The government intends on pouring an additional 300 billion dollars into new mortgages. This way the private financial institutions can offer loans to even the most financially devastated homeowners in an effort to save their property from foreclosure.

A good government selling point is that the American taxpayer will not pick up this new funding burden for refinancing home loans. It will be the government sponsored Fannie Mae and Freddie Mac insurance programs that will pick up the refinancing home loans on mortgages that are in jeopardy. The Fannie Mae and Freddie Mac government chartered organizations will buy the mortgages directly from the financial lenders.

There are drawbacks for private lenders. They will be obliged to refinance loans at less than the value of the home itself. This measure means that banks and other lending institutions will sustain losses from this intervention. While homeowners benefiting from the issuance of these new refinancing home loans would be required to share their profits with the government upon the sale of the property.

The government will also benefit from this funding by collecting fees from financial lenders and from the homeowners as well.

There will be a new agency that will coordinate the Fannie Mae and Freddie Mac programs with the participating financial institutions.

It is expected that close to 500, 000 homeowners could benefit from the new refinancing home loans.

After the initial year of operation this new bill will establish a program to generate affordable housing.

This new government bill has been hailed by some of the economic experts as a good jolt to the sluggish economy and a lifesaver to the homeowners who really need it.

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Government rescue home loans for unemployed Michigan

January 27th, 2011

The Obama Administration is attempting another housing crisis rescue. This time it targets five states hardest hit by home price declines and unemployment. The objective is to give home rescue aid to homeowners destine for foreclosure because of unemployment, underemployment, or medical crisis.

State housing finance agencies across the nation were challenged to propose innovative programs to assist troubled homeowners. This government assistance fund, named the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets, was designed to target states with the sharpest decline in housing prices (over 20%) and unemployment rates exceeding 12%.

The US Treasury has already approved housing finance agency programs in Arizona ($125.1 million), California ($699.6 million), Florida ($418 million), Michigan ($154.5 million), and Nevada ($120.8 million). Additional programs are expected to be approved in North Carolina ($159 million), Ohio ($172 million), Oregon ($88 million), Rhode Island ($43 million), and South Carolina ($138 million).

The first of these home loan rescue programs to be implemented is in Michigan, by the Michigan State Housing Development Authority (MSHDA). Michigan’s Helping Hardest Hit Homeowners plan is structured to provide the following assistance:

Help with mortgage payments for homeowners currently on unemployment,
Catching homeowners up on missed mortgage payments due to unemployment or medical crisis, and
Federal matching dollars to assist homeowners with principal reductions on homes they can no longer afford due to reduced income (underemployment).Michigan’s Governor Jennifer Granholm has also said, in her recent announcement of the new mortgage assistance, that she will be asking the Obama administration to also consider expanding the program to include Michigan’s long-term unemployed whose benefits have expired.

The only wrinkle in all of these government mortgage assistance programs is the need for servicer participation. There is no requirement for any mortgage servicer to participate or assist these borrowers headed for foreclosure.

Mortgage servicers are the mortgage lenders and specialty companies that actually manage these mortgages. Their role is to collect payments, manage escrow, and make adjustments and modifications to these loans on behalf of mortgage investors. These investors own the individual home loans at are packaged together into mortgage-backed securities. This complexity and distance between borrowers and investors can make loan workouts challenging.

Homeowners that are currently receiving unemployment compensation, have experienced unexpected medical expenses, or have had a significant reduction in income should contact their mortgage servicing agency. This contact information is typically available on your mortgage payment statement.

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Federal government home loan

November 24th, 2010

This includes help with a home loan that may make the difference between whether or not you can keep your home in these economically trying times. It should be made very clear that the federal government is a great source of help when it comes to home loans.

Whether you are a new homeowner or have owned your home for a few years, either scenario can present the challenge of continuing to pay your home loan on time. The Federal Housing Administration (FHA) is an excellent resource for many various phases of home interests, including working away from a foreclosure.

When you are facing a foreclosure, everything that involves your home can take on a new and different meaning. There is no allowance for taking home ownership for granted once your lender informs you that you are in a foreclosure. Whether you plan to try to keep your home or sell it to relieve yourself of the financial debt, there is a process you must go through to deal with foreclosure.

Deciding to fight a foreclosure involves taking an honest look at all of your financial obligations, not just your home loan. Any type of assistance that you seek will be asking you to do this. Not just to find out where you are spending your money but to help you realistically determine whether or not you can afford to keep your home under the current budgetary restraints you have.

Sometimes it turns out that it is better to sell your home, recoup your losses and prepare to purchase a home in the future when it is more economically feasible. For most people, however, their homes are a value in a variety of ways that they want to continue to enjoy. Some home are family treasures, passed down from parents or grandparents.

If your home is a treasure you want to keep in your family, it is important that you find the resources you need to help save your home from foreclosure. First and foremost, establish and maintain an open dialect with your lender. Although the lender has the interests of the lending organization to maintain, your lender does not want your home. The lender’s obligation is to ensure that the loan their organization has provided to you is paid.

Failure to make your home loan payments results in foreclosure. Communicating with your lender is important to indicate what steps you are planning to take to save your home. Chances are, your lender may suggest refinancing, which can be done through one of the many federal home loan programs that are available to homeowners who qualify.

A federal home loan can be the relief you need from foreclosure. Many such refinancing options take your current home loan, adjust the interest rate and roll late payments, penalties and other fees are returned to the home loan. These options for the end to make your home loan payments affordable and stop the foreclosure process.

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Getting Help with bad credit – government housing loans

June 5th, 2010

If bad credit hounds you like a nightmare you cannot seem to escape from, then the government has provided you with a home loan as a lifeline. Unlike ordinary loans, those with credit difficulties can avail them with fairly lower interest rates.

Two government agencies, the Federal Housing Administration (FHA) and Veteran Affairs (VA) offers bad credit government home loans.

Government Loans by FHA government home loan is offered to people engaged various professions. These provide by FHA is targeted at people having low income and those with bad credits, generally people who are not able to qualify for regular home loans.

Requiring only as low as 3 percent down payment, the FHA can be availed at much lower interest rates. The location of the house to be bought, however, dictates the amount of money that you can borrow with the assistance of the FHA.

How to determine eligibility

The requirements in the application of the FHA bad credit government are-

Location or addresses where you have been residing for the past 2 years

The name and address of your employer for two years together with your gross monthly salary

The last two year’s W2

You can avail the FHA loans at either variable interest rate as well as fixed. Only the payment Mortgage Insurance Premium (MIP) up front is what can be considered as its only disadvantage. For loans of 15 or 30 year, the FHA, the computed MIP is 1.5 percent of the amount to be borrowed, and one half percent of the annual renewal premium must be paid for the loan‘s life. Of course, each state or county has their own policies for making loans.

Bad Credit Government Home Loans by VA

The Veteran Affairs Department offers a loan that suits veterans perfectly. The aim of the loan is to aid in the acquisition of property by veterans. The risk to the lenders is minimized by the backing of the Veteran Affairs Department. The lender can then provide you with a loan with reduced interest rates.

The veterans can get up to one hundred percent the amount of the property using the VA bad credit government home loan. There is no need to pay for any mortgage insurance premiums or even down payments. Your veteran’s certificate must be provided, however, before availing the VA bad credit government home loans.

No matter which loan offered by the government to take, you should always remember that these credits are not given directly by the government. The government only acts as a guarantor for a loan when you are unable to pay the creditor.

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Loan Modification Criteria to Qualify For Government Home Rescue Plan

April 25th, 2010

There is a lot of confusion and wrong information on just what it takes to qualify for the federal home rescue plan.  Before you get frustrated and give up, take a moment to learn the loan modification criteria that you lender will use to determine if you are eligible for the government sponsored loan workout program.

The good news is that President Obama has initiated the federal home saver plan and set up standard guidelines for that are used for loan modification criteria by all participating lenders.  Prior to this, each bank used their own factors to determine who got help-that made it very difficult to even know what you were supposed to be aiming for.  Consequently, very few homeowners were successful with their loan workouts.  Now however, you can learn the standard criteria, and then use that information to fine tune your own application before your lender reviews it.

Loan modification criteria must be met and proven in black and white before you will be offered a loan workout.  The basic conditions for applying for the Home Affordable Plan are:

Live in the home as your primary residence
Your loan was taken out prior to January 1, 2009
Loan amount is less than $729,750 (for 1 unit- higher for 2-4 unit properties)
Current payment equals more than 31% of your gross monthly income
Facing a financial hardship situation due to loss of income, higher expenses or other circumstances beyond your control
Once you pass this initial loan modification criteria, you will be asked to submit some application forms.  These will include:

Hardship letter/Affidavit
Financial Statement-details your income and expenses
Current pay checks or other proof of household income
Bank statements
2 years tax returns-federal only
All of this information will be reviewed and based on the information you provide, a determination will be made if you qualify or not for government assistance.  You do have some control over whether your application has a good chance of success or not.  You should take the time to learn the 4 step formula that your lender will use to determine if you meet the loan modification criteria set forth by Obama.  You can then use this very same formula to make any necessary adjustments to your financial statement before the lender reviews it.  Why take chances when you home is on the line?  Do everything you can to make sure you have the best chance of approval.

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