President Obama is urging homeowners everywhere to save their home, and get a more affordable mortgage by using his “Making Home Affordable” plan. This mortgage bailout plan is designed to help the homeowners everywhere who are facing foreclosure, or soon will be because they can barely afford their mortgage payments. Here are some incentives President Obamas plan gives to homeowners:

This plan allows many homeowners the chance to get approved for refinancing, even if they would have been denied before. This plan, provides help for:

-Homes already in the foreclosure process, or at risk of being lost to mortgage default.
This program will stop the foreclosure process, and allow a homeowner a chance to get caught up on their payments. All late fees and penalties will be rolled into the new home loan amount when the refinancing occurs. Homeowners who have missed payments and are at risk of defaulting will still need to pay them, they are just rolled into the loans total amount.

-Homeowners who owe more on their home loan than the homes market value.
Many homeowners bought a home when the market was booming. Also, a lot of people got into an ARM loan thinking that the value of their house would increase, and they could refinance later. However, with the market in such bad shape, many homes have lost value. Many of the ARM mortgages so many people got have increased dramatically in the payment amount. This new stimulus plan from President Obama will allow homeowners to get approved for refinancing if they owe as much as 125% on the mortgage in comparison to the homes actual worth.

-Mortgages that are backed by Fannie Mae or Freddie Mac.
Homeowners with a mortgage by either of these companies, and who pay more than 31% of their gross monthly income towards their monthly mortgage payment, will qualify to get a mortgage modification. While different from refinancing, a home loan modification under the Presidents guidelines will still prevent a homeowner from losing their home and provide them with a lower mortgage payment every month. Homeowners will be able to get a mortgage that is less than 31% of their income, and stop the foreclosure process if it is already in process.

-M Petrone

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