On October 24, 2011, President Obama travelled to Nevada to announce a new federal plan designed to help boost the housing market and save homeowners struggling with their mortgages.
The plan would permit homeowners who are underwater, meaning they owe more on their mortgage than their home is worth, or owe at least 80 percent of what the home is worth, to receive lower interest rates on their loans. This will bring down the homeowner’s monthly payments and help alleviate some of the pressure on homeowners. The program will allow homeowners backed by federal mortgages to refinance their loans without having to jump through many of the hurdles currently required. Qualified homeowners would not need to undergo a full credit check or get an appraisal on their homes.
Additionally, homeowners who refinance are often charged fees associated with the risk the bank associates with the borrower. Many homeowners in today’s economic climate are risky borrowers because they have lost their jobs or missed payments on their mortgages. The new plan would eliminate many fees that banks might charge these borrowers in order to balance out their risks in lending.
Of course, there is a catch to this new federal plan. It is most helpful only to those people whose mortgages are held by Fannie Mae or Freddie Mac, which are federally sponsored. If your mortgage is held by another entity, then you will qualify for this program only if you can find a lender who will agree to these terms, and that can be tricky.
One strange thing about the program is that it will reportedly only help borrowers with relatively good credit. Specifically, a homeowner must not have been more than six months late on a mortgage payment within the last year in order to qualify. Las Vegas, for example, has one of the highest foreclosure rates in the nation, but Arizona is, unfortunately, also high on that list.
For many struggling homeowners, this program might be a huge relief. It may be an option to consider if you are struggling to make your monthly payments. It can be done in conjunction with bankruptcy, as well. If you are worried about making mortgage payments, bankruptcy may be used to help reduce your other costs in order to assist you to stay current and qualify for the new program.
Emely Peight loves writing about bankruptcy issues. To get additional bankruptcy info or for Tucson bankruptcy help, or if you require an Az bankruptcy attorney, please check out these bankruptcy sites today.
