Loan Modification Program Making Home Affordable
Last week President Obama's administration began implementing a $75 billion loan modification program and homeowner refinance program to help as many as 9 million homeowners avoid foreclosure. The plan uses money from the $700 billion approved last year as part of the TARP I funds that were originally used to bailout banks and get credit flowing.
This new plan, dubbed Making Home Affordable, uses incentives to encourage lenders and loan servicers to modify loans. The lenders and servicers can do this either by lowering interest rates or by dropping the principal amount of the loan. J.P. Morgan's Jamie Dimon said that the bank would not reduce principal payments; they would only lower interest rates for 5-years and after 5-years, the loans interest rates would reset to current levels (around 5%).
The Making Home Affordable plan has two main components. The Home Affordable Refinance portion of the plan offers current homeowners that are not behind on their mortgage payment breathing room by allowing the homeowners to refinance their home into lower interest rate loans, this is done by allowing them to refinance to as much as 105% of the home's current value.
The Home Affordable Modification portion of the plan offers assistance to struggling homeowners that are behind on payments and in danger of losing their home to foreclosure. This portion of the plan modifies a current mortgage so that a homeowner's monthly payment is no more than 31% of their monthly gross income.
If you're a homeowner that would be interested in refinancing their home into lower interest rates, or a homeowner that is struggling to meet financial commitments and needs a loan modification, visit the new government website Financialstability.gov.
This plan is a portion of the larger TARP II plan that may include a "bad bank" that will buy up troubled assets from banks; it's a plan that could cost as much as $2 trillion, but at the same time, TARP II may stabilize our financial and housing markets. Do you think the plan will help curb foreclosures and get our economy back on its feet?
New Homes Section is a leader in providing housing information that matters. Learn more about the loan modification program by visiting our blog. On our blog, you'll find quick links to frequently asked questions and information about the new $8000 new home tax credit for new home buyers
Article Source: http://EzineArticles.com/?expert=Jayson_Gibson
This new plan, dubbed Making Home Affordable, uses incentives to encourage lenders and loan servicers to modify loans. The lenders and servicers can do this either by lowering interest rates or by dropping the principal amount of the loan. J.P. Morgan's Jamie Dimon said that the bank would not reduce principal payments; they would only lower interest rates for 5-years and after 5-years, the loans interest rates would reset to current levels (around 5%).
The Making Home Affordable plan has two main components. The Home Affordable Refinance portion of the plan offers current homeowners that are not behind on their mortgage payment breathing room by allowing the homeowners to refinance their home into lower interest rate loans, this is done by allowing them to refinance to as much as 105% of the home's current value.
The Home Affordable Modification portion of the plan offers assistance to struggling homeowners that are behind on payments and in danger of losing their home to foreclosure. This portion of the plan modifies a current mortgage so that a homeowner's monthly payment is no more than 31% of their monthly gross income.
If you're a homeowner that would be interested in refinancing their home into lower interest rates, or a homeowner that is struggling to meet financial commitments and needs a loan modification, visit the new government website Financialstability.gov.
This plan is a portion of the larger TARP II plan that may include a "bad bank" that will buy up troubled assets from banks; it's a plan that could cost as much as $2 trillion, but at the same time, TARP II may stabilize our financial and housing markets. Do you think the plan will help curb foreclosures and get our economy back on its feet?
New Homes Section is a leader in providing housing information that matters. Learn more about the loan modification program by visiting our blog. On our blog, you'll find quick links to frequently asked questions and information about the new $8000 new home tax credit for new home buyers
Article Source: http://EzineArticles.com/?expert=Jayson_Gibson
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