President Obama could not have picked a more harsh economic times to become President. Neither the markets or the economy are in any kind of condition to fix themselves. The statistics say that 1 of 9 homeowners are facing foreclosure and the other 8 will soon be facing foreclosure or defaulting on their mortgage. Reasons are simple, income levels are down for many who still have their jobs, and property values have dramatically dropped all over the country leaving homeowners with a bigger mortgage than their home is worth.

Luckily, Obama has enacted his “Home Owners Stability Plan” which came into effect earlier this month. This plan will help over 5 million current homeowners stabilize their monthly mortgage payment and save their home from being foreclosed on. The government under this plan has released over $75 billion just for housing issues facing homeowners.

Here is some of the key points of the Obama “Home Owners Stability Plan”:

-Mortgage lenders and banks will receive $1,000 for every loan modification they grant.

-The policy stresses the point that a foreclosure does not help either the borrower or the lender and that modification or refinance should be favored.

-Usually 20% equity in your home was required to refinance or modify your loan. Now though homeowners using this plan can refinance or modify their mortgage if they owe as much as 105% of what their home is worth.

-Monthly mortgage payments will not exceed 31% of the homeowners gross monthly income.

-Total monthly home payments, car payments, credit card debts, should not total more than 55% of your pre tax income.

-Obama has provided mortgage counseling under the HUD name. They will help you find and negotiate the right refinance or modification for your needs. They are better than private companies as they are not commission based.

-The only limitations are that your mortgage is insure, owned, or backed by the lending giants Freddie Mac or Fannie Mae.

Refinancing a home mortgage can be a great money saving ting to do if it is done the right way but be careful and make sure you are getting the best deal you can.

-M Petrone

Subscribe via email

Enter your email address:

Delivered by FeedBurner