Obama's $75 million Home Affordability and Stability Plan is a rescue attempt to save the plummeting housing market.
Online PR News – 09-April-2010 – – The President has the certainty that by restructuring their mortgages, homeowners who are struggling to make ends meet, would be able to save their homes. This plan comprises of two parts:
1. Home Affordability Refinance Program - this program helps homeowners to refinance loans that went upside-down because of the tumbling property rates.
2. Home Affordability Loan Modification Program - This home loan modification program is intended to lessen mortgage installments for individuals facing foreclosure through modifying their mortgages, and decreasing payments.
Numbers of homeowners aren’t eligible for refinancing as per to the Obama mortgage program. Therefore, the home loan modification services have turn to be more popular. The eligibility criterion for applying for loan modification incorporates possessing as well as occupying a one to four unit home, having a loan that originated before January 2009, and having a due principal balance equal to or less than $729,750 for a single-family property. If an individual doesn’t live in the house, then he/she won’t be qualified to apply for the Obama mortgage plan. As well, the figure $729,750 is significant. The total loan amount might exceed this number. However, the principal amount to which no interest is added, shouldn’t exceed this figure. Furthermore, subordinate loans and second mortgages might not be included in this amount.
If the house is a multi-unit property, the limits might go higher. If the mortgage is practical on four-unit assets, and the owner takes up it too, then the limits could be higher as per the HUD rules for the Obama mortgage loan modification programs. There’re some other requirements to apply under Obama mortgage modification. The monthly mortgage payment should exceed 31 percent of the individual's total monthly revenue. And the applicants need to show a significant rise in earnings or fall in expenditures that have enabled the applicant to pay the FHA home loan or other mortgage.
Under this program, rate of interest could be lowered to as low as 2%*, and the period of the mortgage repayment could be extended to an utmost of 40 years. As well, the service providers would be obligatory to reduce the monthly payments to less which 31 percent of the gross monthly earnings. This would be considerably lower mortgage payments as you go through mortgage loan modification. Reduction in payments could actually be advantageous to individuals who are on the verge on losing their homes, and stop foreclosure. They could start making their payments frequently.