Since there has been a surge of people facing foreclosure, President Obama and his administration have implemented a home refinancing stimulus package and loan modification program to help. The plans were made specifically for people who are having difficulties repaying their loan. This package that President Obama has created will cover 9 million mortgages and on top of that the government will spend $75 billion in helping homeowners.

2 main components for Obama's Stimulus Package:

#1. Refinance

#2. Loan Modification

Let us discuss these components in detail:

#1. Home Refinance Stimulus Package

Ø Using this package Fannie Mae and Freddie Mac, the two most powerful lending agencies, would refinance homes for those who owe more than their home is actually worth. The condition for the package is that Fannie Mae and Freddie Mac be the ones to refinance or modify the mortgage loan.

-This can be a great plan however it will not apply to a home that you do not live in. The offer will only apply to a property that is used for residential purpose. Those that have a home that they do not live in will not qualify for Obama’s home refinancing stimulus package.

2. Loan Modification Stimulus Package

-The lenders that will approve struggling borrowers for loan modification or refinancing will receive incentives provided by Obama and his government. The Presidents believes if this is done homeowners facing foreclosure will be able to stay in their homes. The biggest feature of the package is that the interest rate will drop and can drop down to as low as 2%, the tenure of the loan will increase in order to reduce the borrowers monthly payments and any late fees will as be waived.

-Using the loan modification process the homeowners will have their payments reduced and would be 31% of their monthly income. Sounds like a lot but it is less than you are paying now.

-M Petrone

Subscribe via email

Enter your email address:

Delivered by FeedBurner