Help For Homeowners From the Obama Mortgage Relief Plan

April 25, 2012 by  Filed under: Loans 

The Obama Mortgage Relief Plan offers hope to millions of American homeowners. Nine million homeowners are estimated to potentially benefit from this program. It was originally introduced in 2009 and is designed to help people keep their homes and avoid foreclosure. This will be accomplished by refinancing and modified loans which will lower monthly payments.

President Obama requested that Congress allow the Federal Housing Administration to refinance privately held mortgage loans in a program which will be paid for by a fee charged to large banks based on their size and the riskiness of their portfolios. It is estimated that this could cost $5- to $10 billion. Only houses with values that fall within FHA guidelines would qualify. The bank fee would be used to insure the FHA against the credit risk of taking on these new mortgages.

Fannie Mae and Freddie Mac are also included in the Obama Mortgage Relief Plan. These programs eased some of their restrictions previously on refinancing. But President Obama and the White House wanted more relief provided. According to the Federal Reserve, some of their barriers to refinancing are unjustifiable.

The Obama Mortgage Relief plan is intended to force some competition into the refinancing market amongst the mortgage giants. It will give everyone an opportunity to refinance even when they owe more than their home is currently worth. That is a category that approximately 10 million homeowners find themselves in now. Many homeowners are trapped in their homes due to this condition.

Not every homeowner in trouble will be able to receive help however. There are, of course, certain criteria that must be met. One important criteria is that homeowners must be current on their mortgage. This alone will prevent many from receiving the help they desperately need, still the program will help many families and individuals keep their homes.

If your home that you need to refinance is your primary residence, then you may be able to qualify for the Obama Mortgage Relief Plan program. This is a commonly seen requirement for those with FHA loans. Holders of commercial loans though might be surprised to find out about this requirement. The Obama mortgage is not intended to help with secondary homes.

Loan-to-value ratios are another criteria to be met. If the loan-to-value ratios are above 80% on your mortgage, normally you would not qualify for refinancing. But with the Obama Mortgage Relief Plan legislation homeowners in this category get a second chance. This could mean lower mortgage rates and stable interest rates if you qualify.

The Obama Mortgage Relief Plan has been one of the most popular home foreclosure prevention initiatives even undertaken by the U.S. government. With the real estate market struggling as well as homeowners, this plan was destined to be popular. Now, struggling homeowners across the country can take advantage of the program which allows them to save face in times of economic difficulty. But more importantly, it can help them save their homes.

I’m a loan advisor specializing in Obama mortgage relief plan.

Article Source:
http://EzineArticles.com/?expert=Kevz_Barry

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