President Obama and his administration have recently announced details of their home affordability stimulus plan, which should help as many as 1 out of every 9 homeowners avoid foreclosure or more easily refinance even if the amount owed on the mortgage is more than the home is worth.

This housing stimulus announcement came just 2 weeks after President Obama stated that $75 billion dollars would be spent on housing and mortgage problems out of a $787 billion dollar economic and financial-bailout stimulus plan.

This housing affordability stimulus plan from Obama had to be carefully laid out and implemented due to the Obama administration not wanting to look as if though they are rewarding homeowners who were greedy or reckless during the housing boom times. Therefore the first step of this plan is to help homeowners who have remained current on their mortgage payments for at least 12 months. Although, regardless of payment history, there is other refinancing options available.

The administrations outlined estimates say that this stimulus plan will benefit as many as 9 million current mortgage holders, and has 2 main components to it.

First, mortgage lenders, banks, and other financial services offering mortgage refinancing will be offered incentives and other subsidies from the government to loosen up the refinancing requirements for homeowners who are having financial difficulties that are so bad that losing their home is a serious risk. These borrowers will have to sign financial hardship affidavits to this effect detailing their hardships. For doing this, homeowners can see their current interest rates drop to as little as 2%, their mortgage lengthened, or other methods to bring down the monthly mortgage payment to 31% of the homeowners gross monthly income. This stimulus plan will be limited though to first lien mortgages only with mortgage amounts that do not exceed $729,000 for a single family home.

Mortgage lenders, banks, and other home loan providers will also get up to $3500 from the government to participate in this program as well as matching portions of the mortgage lenders or banks costs dollar for dollar in some circumstances. Homeowners are also eligible to get up to $5,000 in federal money to help reduce or pay off other outstanding balances as a way to ensure they do not lose their home later down the road. Also noted by Obama administration officials was the fact that people who purchased homes as investments and not primary residences are not eligible.

Second, this plan calls for government backed mortgage lenders Freddie Mac and Fannie Mae, to allow home refinancing for literally millions of current homeowners who owe more on their existing mortgage than their home is actually worth, even if they are not having problems making monthly mortgage payments. There is no limit to the amount these mortgages can be for either. However, the mortgage must be backed by Freddie Mac or Fannie Mae and can the borrower can not owe more than 105% of the total value of their home.

Refinancing a home mortgage now with the help of President Obamas “Home Affordability Plan” will save millions of homeowners hundreds of dollars every month. Get in touch with your mortgage lender or a potential lender today and see what kind of assistance you can get through this housing stimulus plan.
-M Petrone
www.RefinancingCondo.com

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