Originally introduced in 2009, the Obama Mortgage Relief Plan offers millions of American homeowners hope. It is estimated that over nine million homeowners could benefit from the program. It is designed to help homeowners save their homes from foreclosure. That salvation comes in the form of modified loans and refinancing which lowers monthly payments.
Congress has been requested by President Obama to allow the Federal Housing Administration to refinance privately held mortgages in a program to be paid for by charging a fee to the banks based on their size and the riskiness of their portfolios. The program could cost up to $10 billion. Houses falling within the F.H.A. guidelines would be the only ones to qualify. The credit risk of taking on these mortgages would be insured against by the F.H.A. with the bank fee charged.
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.
It is the intention of the Obama Mortgage Relief Plan to force some competition into the refinancing market. It will give even those who currently owe more than their home's worth an opportunity to refinance. That is a category currently shared by approximately 10 million homeowners. Many of them are trapped in their current mortgage because of this reason.
Of course, not every homeowner in trouble will be able to receive help. Certain conditions must be met to qualify. Being current on their mortgage is one important criteria homeowners must meet. That obstacle alone will prevent many of them from receiving the desperately needed help, still many will get assistance.
Another criteria to be met is that the mortgage must be on a primary residence in order to qualify for the Obama Mortgage Relief Plan. The plan is not intended to help with mortgages on second homes. FHA loans often have this requirement. But holders of commercial loans may be surprised by the inclusion of this criteria.
Loan-to-value ratios above 80% on a mortgage would normally prevent qualification for refinancing. This ratio is also considered under this plan. But with the Obama Mortgage Relief Plan a ratio this high will not necessarily prevent qualification and these homeowners will get a second chance. If they qualify, they could receive lower monthly payments and stable interest rates.
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.
Congress has been requested by President Obama to allow the Federal Housing Administration to refinance privately held mortgages in a program to be paid for by charging a fee to the banks based on their size and the riskiness of their portfolios. The program could cost up to $10 billion. Houses falling within the F.H.A. guidelines would be the only ones to qualify. The credit risk of taking on these mortgages would be insured against by the F.H.A. with the bank fee charged.
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.
It is the intention of the Obama Mortgage Relief Plan to force some competition into the refinancing market. It will give even those who currently owe more than their home's worth an opportunity to refinance. That is a category currently shared by approximately 10 million homeowners. Many of them are trapped in their current mortgage because of this reason.
Of course, not every homeowner in trouble will be able to receive help. Certain conditions must be met to qualify. Being current on their mortgage is one important criteria homeowners must meet. That obstacle alone will prevent many of them from receiving the desperately needed help, still many will get assistance.
Another criteria to be met is that the mortgage must be on a primary residence in order to qualify for the Obama Mortgage Relief Plan. The plan is not intended to help with mortgages on second homes. FHA loans often have this requirement. But holders of commercial loans may be surprised by the inclusion of this criteria.
Loan-to-value ratios above 80% on a mortgage would normally prevent qualification for refinancing. This ratio is also considered under this plan. But with the Obama Mortgage Relief Plan a ratio this high will not necessarily prevent qualification and these homeowners will get a second chance. If they qualify, they could receive lower monthly payments and stable interest rates.
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.
About the Author:
I'm a loan advisor specializing in Obama's mortgage plan. For more resources and information, check out http://www.alliedmortgagedirect.com.
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