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Home Refinance Stimulus Package – Look What Obama’s Stimulus Package Can Do For You

April 30th, 2010

Under Obama’s leadership, the federal government has begun a series of steps to help alleviate the burden that the housing boom-then-bust has caused the American taxpayer and also the lenders. The home refinance stimulus package for mortgage refinancing and loan modification can do some amazing things for you if you are in need and qualify. What do you need to know about this package? Here is some needed information for you.

There are two main components to the package. They are: 1) refinancing and 2) loan modification. With the refinancing plan, the house must be occupied as the primary residence by the person who took out the mortgage. If that condition is met, Fannie Mae or Freddie Mac refinance the loans of any home that is upside down – that is, the owner owes more than the house is worth.

With the loan modification component, lenders and borrowers can agree on different terms for the mortgage. In order to qualify, again, the property must be your primary residence. Also, you must show economic hardship. Once you do that, the lender applies a formula and may lengthen the term of the mortgage up to forty years, reduce the interest percentage, and/or otherwise negotiate terms in order to get the mortgage payment down to no more than 31% of the household’s gross monthly income.

With Obama’s home refinance stimulus package, you may be able to keep your home rather than losing it to foreclosure, even if you are unable to meet your current payments.

If the bad economy has struck your household and you are having difficulty making your mortgage payments, do not wait until it is too late. Contact a professional who specializes in his type of arrangement or contact your lender directly yourself.

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Loan Modification For Second Loans With Obama’s Federal Program

April 25th, 2010

Do you have a first and second loan on your home? Having trouble making the mortgage payments due to a financial hardship? The federal bailout for borrowers now offers a program to help those facing imminent default. Homeowners facing financial hardship may qualify for help on their second mortgages with the federal loan modification plan enacted by President Obama. The very aggressive loan workout program is aimed at reducing mortgage payments so that borrowers can avoid foreclosure and stay in their homes. This plan is extended to include second trust deeds. If you have a second mortgage, here is some helpful information on how to apply for a loan modification using this program.

This is a voluntary program, but most lenders are expected to be participating. The Treasury Department will pay banks up to $1500 for each qualified mortgage that is modified under the program. That is a big incentive to get the lenders to offer help to desperate homeowners. In addition, borrowers will be paid-for-success under this plan. Eligible homeowners will receive $500 upfront and $250 for three years as long as they do not re-default. This bonus payment will be credited towards the loans outstanding balance.

A loan modification on a second loan under the federal plan could include lowering the interest rate to 1% for five years to achieve an affordable and sustainable payment. The government may subsidize part of the participating banks losses caused by the new loan terms. Another option under this federal loan workout involves paying the bank that holds the second lien up to 12 cents on the dollar to retire the debt. This will be at the banks sole discretion and is not mandatory.

Homeowners who have lost alot of value due to the housing downturn may be offered a loan workout that includes forgiving or deferring a large chunk of their second loan balance. Many homeowners who are underwater are simply deciding to give up their home-adding to the mounting foreclosure problems. The idea is to encourage borrowers to keep making payments by helping to reestablish a more equitable position on their home loan. Although not everyone will be given this option, it is being offered more frequently. Be sure you contact your second trust deed holder to inquire about the possibility of forgiven or deferred principal.

Interested homeowners will be asked to prepare a loan modification application and provide evidence of a financial hardship situation. A determination will be made based on this information, and qualified homeowners will be eligible for this aggressive program. A successful borrower will be able to submit a complete and accurate application that meets the requirements for approval. Make sure you understand how to prepare your paperwork before contacting your lender. Trying to prepare your own accurate and acceptable financial statement can be frustrating and confusing. Take advantage of the new Loan Mod Quick App software program to help you with your application. SImply input your own financial information and the software will do all the calculations for you. Why take chances with your home? A new lower payment could be the solution you need to stay in your home-make sure you take the time to do it right.

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Obama’s Loan Modification Plan – Review of Home Loan Modification Incentives in the Stimulus Plan

April 24th, 2010

President Barack Obama is all set to help the home owners in US to save their homes. He has taken up the strategy of loan modification. Earlier the loan modifications did not do so well in US. The President explains ‘The earlier plans failed mainly because the monthly payments did not reduce in real sense. We have laid a great focus on affordability. Our plan is sure to work well’.

Review of Obama’s Loan Modification Program

Here are the reviews for Obama Loan Modification Program that would help you understand this plan better:

· Earlier the criterion to apply for loan modification was that the borrower must have 20% equity in the home. Now, in case your mortgage amount exceeds 105% of the current evaluation of the home you are eligible to apply for the loan modification.

·The rates of interest would now be levied on a fixed rate of interest. Earlier several contracts were made on a variable rate of interest.

· The rates of interest in the modified loans would be levied on a lower rate. From 6.5% they are reduced to 5.16%.

· The new monthly payments would now not exceed 31% of the gross monthly income. Also the sum of all credit payments together can not exceed 55% of the pre tax income.

· The loans owned or insured by Fannie Mae and Freddie Mac are all eligible for loan modification.

· The loans that are not owned or insured by these agencies can be refinanced by these two.

· Also there are several grants, tax credits and loans available that could help you clear the pending payments and hence, save your home from a foreclosure.

· The HUD (US Federal Housing & Urban Development) department has also appointed several experienced & professional counselors who help you negotiate the deal with your lender.

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Obama Home Loans – Is Obama’s Stimulus Plan Helping Homeowners on Their Mortgage?

April 23rd, 2010

President Barack Obama has announced his 2009 Stimulus Package with the focus on save the home owners and affordability. It has helped several people in United States to save their home from being foreclosed. Obama home loans have come in the form of tax rebates, loans and tax credits.

How Obama’s Stimulus Plan is helping Homeowners on their Mortgage

Here are the details which tells you how obama stimulus plan is helping homeowners on their mortgage

· The grants & tax credits are especially available for the ones who are buying their first home & car.

· The home owners can now apply for loan modification in case your mortgage amount exceeds 105% of the current value of the house.

· The loans owned or insured by Fannie Mae & Freddie Mac are eligible for the loan modifications.

· After the modification the new rate of interest would reduce from 6% to 5%.

· The mortgage monthly payments would now be restricted to 31% of the gross monthly income. Also the sum total of all the credit payments like credit cards, homes, cars, etc. can not exceed 55% of the pre tax income. This would make the home affordable in the long run.

· There are several personal loans and grants available that would help you meet your mortgage & debt payments.

· Grants are also available for the day to day purposes like food & clothing, renovating your home, grants for the parents of the college going students, etc.

· The new Stimulus Package would also help you save your expenses made on the private counselors. The counselors appointed by the US Federal Housing & Urban Development Department (HUD) would help you present your case in front of the lender and negotiate the best possible deal free of cost.

· The new mortgage deals are being made on lower rate of interest that too at a fixed rate of interest. The economy being at its all time low, this is another long term benefit for the home owner.

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Home Loan Modification Myths – Modifying Loans Under Obama’s ‘Making Homes Affordable Plan’

April 4th, 2010

Home loan modification has recently become a hot topic in many American households. Though it was always possible to renegotiate the terms of a loan and have them adjusted by your lender, the process wasn’t commonly performed until the recent mortgage meltdown. Though modifications are becoming a lot more common now, there are still a lot of home loan modification myths surrounding the subject.

With the passage of the President’s new Making Home Affordable (MHA) plan, lenders now have a consistent set of steps to follow in the case of home loan modification. From March 4, 2009 until December 31, 2012 homeowners will be able to use the $75 billion Homeowner Stability Initiative to obtain home loan modifications.

Participating lenders are paid out monetary incentives for adjusting your loan, and those incentives often make a modified loan much more profitable than foreclosure or other alternatives. In this way, the MHA plan works to get 4 to 5 million Americans out of financial trouble and save their homes.

Surprisingly, though, there are a lot of misunderstandings and myths about the MHA plan. Many people mistakenly believe that the government is forcing lenders to participate in the plan. That is completely untrue. The MHA plan provides a consistent set of procedures for modifying loans and provides lenders with incentives to arrive at workable modifications, but it does not coerce lenders to do so.

The lender is advised to calculate whether the modified loan would be more profitable than foreclosure, and then to choose the more profitable option. The thing is, foreclosure is an awfully expensive, time-consuming, unprofitable affair for lenders anyway. Combined with the incentive payments provided under the MHA plan, lenders almost always decide that modification is a better alternative to foreclosure.

A second big misconception is that the Homeowner Stability Initiative money will be aiding speculators and house flippers. That is also completely untrue. To take advantage of loan modification under the MHA act, you must be the owner and the occupant of the home in question. Your home address is determined by a credit check. No vacant or condemned homes are allowed to participate in MHA loan modifications. Second homes and investment properties are also ineligible.

Of course there will be lots of home loan modification myths out there during this period of financial turmoil. The new MHA plan is new, and people are still learning how it works. Just get educated and make sure to get the facts about loan modification under the MHA plan.

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