In these bad economic times I see property owners running around with difficulty to get info on the Internet to keep their homes from falling into foreclosure or rescue it out of foreclosure. The common question that most loan holders have is can the Obama foreclosure plan work for me.
Lets look over the options that loan holders have that are about to fall behind on their home mortgage or are already behind in their loan. Most of the options are pretty much set in stone and you might not qualify over the simplest of options.
Help for those seeking refinancing
This part of the program targets note holders who have kept current on their notes. Many of the note holders in this classification have been unable to drop their housing costs through refinancing because of sinking home value.
Today, if you're sinking on your mortgage, owing more than the dwellings market value, forget about qualifying for a refi. Also, at least 20% equity in your home is now a must, unless you have an FHA loan.
The new guidelines should help. Even note holders with debts that exceeds home value by 5% could be eligible, And you will have no prepayment penalties. For this plan to work your loan has to be be owned or backed by Fannie Mae or Freddie Mac.
The Government estimates that this plan will enable up to 5 million note holders to receive lower interest rate mortgage.
Who's not eligible. Mortgage holders whose property values have fallen sharply, putting them below by more than five Percent are out of luck.
People with "jumbo" loans also wont qualify only those with "conforming' mortgages do. To be very sure what type of loan you have, you need to contact|check with your mortgage servicer or lender. But in general, until the past year, loans above $417,000 were known jumbo notes, Fannie Mae and Freddie Mac were not able to buy and guarantee them in the past.
All note holders will have to prove they have enough income to be able to make up their mortgage payments in a timely manor, though what would be sufficient proof wasn't yet clear.
Mortgage modification assistance for at-risk borrowers
Mortgage holders in default or at risk of falling into default may qualify for mortgage modification, which restructure the terms of loans. Anyone with high combined mortgage debt compared to income or who is underwater may be eligible for a loan mod. Mortgage holders with high levels of other debt, such as car loans, RV loans and credit card debt exceeding 55% of their incomes, may still qualify for a loan mod but they'll be required to accept debt counseling in a HUD-certified program for an extended term.
If you qualify, your servicer or lender will reduce your monthly mortgage payments to 31% of your gross income. The payment would stay there for five years and then gradually revert back to the conforming loan rates that would be current five years from now.
Who's not eligible.
Investors, those who paid for homes for investment reasons, do not qualify for aid homes must be owner/occupied.
The Plan will also not reward those buyers who were irresponsible in their borrowing. All borrowers will be closely looked over by lenders and those who acted unscrupulously by, for example, misrepresenting their incomes in no-doc loan applications, would not qualify. Also, in order to protect taxpayers from excessive costs, no loans will be modified unless it results in a savings compared with the costs of foreclosure. Rates will not be lowered below 2% in any case.
That will disqualify many mortgage holders who simply can't afford any reasonable mortgage payment because of illness, for example, or job loss. The Obama Plan will not reward people who bought homes they knew they would never be able to afford, said Obama. "In short, this plan will not save every home." No mortgages for amounts above conforming loan limits would be eligible.
This pretty much covers all the questions we have been getting asked lately about Obama's plan and it's requirements. Economic times are rough and if you find you don't qualify for the Obama plan the best thing to do is hire a foreclosure defense attorney to represent you and protect your home and assets.
Lets look over the options that loan holders have that are about to fall behind on their home mortgage or are already behind in their loan. Most of the options are pretty much set in stone and you might not qualify over the simplest of options.
Help for those seeking refinancing
This part of the program targets note holders who have kept current on their notes. Many of the note holders in this classification have been unable to drop their housing costs through refinancing because of sinking home value.
Today, if you're sinking on your mortgage, owing more than the dwellings market value, forget about qualifying for a refi. Also, at least 20% equity in your home is now a must, unless you have an FHA loan.
The new guidelines should help. Even note holders with debts that exceeds home value by 5% could be eligible, And you will have no prepayment penalties. For this plan to work your loan has to be be owned or backed by Fannie Mae or Freddie Mac.
The Government estimates that this plan will enable up to 5 million note holders to receive lower interest rate mortgage.
Who's not eligible. Mortgage holders whose property values have fallen sharply, putting them below by more than five Percent are out of luck.
People with "jumbo" loans also wont qualify only those with "conforming' mortgages do. To be very sure what type of loan you have, you need to contact|check with your mortgage servicer or lender. But in general, until the past year, loans above $417,000 were known jumbo notes, Fannie Mae and Freddie Mac were not able to buy and guarantee them in the past.
All note holders will have to prove they have enough income to be able to make up their mortgage payments in a timely manor, though what would be sufficient proof wasn't yet clear.
Mortgage modification assistance for at-risk borrowers
Mortgage holders in default or at risk of falling into default may qualify for mortgage modification, which restructure the terms of loans. Anyone with high combined mortgage debt compared to income or who is underwater may be eligible for a loan mod. Mortgage holders with high levels of other debt, such as car loans, RV loans and credit card debt exceeding 55% of their incomes, may still qualify for a loan mod but they'll be required to accept debt counseling in a HUD-certified program for an extended term.
If you qualify, your servicer or lender will reduce your monthly mortgage payments to 31% of your gross income. The payment would stay there for five years and then gradually revert back to the conforming loan rates that would be current five years from now.
Who's not eligible.
Investors, those who paid for homes for investment reasons, do not qualify for aid homes must be owner/occupied.
The Plan will also not reward those buyers who were irresponsible in their borrowing. All borrowers will be closely looked over by lenders and those who acted unscrupulously by, for example, misrepresenting their incomes in no-doc loan applications, would not qualify. Also, in order to protect taxpayers from excessive costs, no loans will be modified unless it results in a savings compared with the costs of foreclosure. Rates will not be lowered below 2% in any case.
That will disqualify many mortgage holders who simply can't afford any reasonable mortgage payment because of illness, for example, or job loss. The Obama Plan will not reward people who bought homes they knew they would never be able to afford, said Obama. "In short, this plan will not save every home." No mortgages for amounts above conforming loan limits would be eligible.
This pretty much covers all the questions we have been getting asked lately about Obama's plan and it's requirements. Economic times are rough and if you find you don't qualify for the Obama plan the best thing to do is hire a foreclosure defense attorney to represent you and protect your home and assets.
About the Author:
Adam Whazzer has been a mortgage councilor over the last few years" Adam has offered end foreclosure and mortgage relief to foreclosure victims who have gotten caught up in the foreclosure mess. If you are facing foreclosure, visit us for more info on this subject
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