The Obama administration recently announced details on its $75 billion plan to help 9 million homeowners.
This plan may benefit more than 100,000 Massachusetts homeowners who have, up to now, been unable to refinance at current low rates due to falling property values.
Under the new plan eligible borrowers with loans held by Fannie Mae and Freddie Mac will be able to obtain new mortgages at currently lower rates, regardless of the amount of equity they have in their homes. Even homeowners who are somewhat underwater, that is, the value of their home is less than what they owe on the mortgage, may be able to refinance.
The full details of President Obama's Homeowner Affordability and Stability Plan are being referred to as "Making Home Affordable" and millions of homeowners are clicking into the government's new Web site, financialstability.gov, to find out if they qualify for refinancing under the plan.
The basic qualifications
- The home you want to refinance is your primary home.
- Your loan is controlled by Fannie Mae or Freddie Mac and must be a conforming loan. You can call Fannie at 1-800-7FANNIE and Freddie at 1-800-FREDDIE or submit online form at Fannie or Freddie.
- You must be current on your mortgage payments (you haven't been more than 30 days late on your payments in the last 12 months.)
- Your loan-to-value ratios (LTV) should be above 80 percent but not more than 105 percent.
- You must have sufficient income to support a new mortgage.
There are a growing number of homeowners in Massachusetts who were sensible borrowers but their homes have plummeted in value. In the face of any loss of income, they are at risk of foreclosure. The current plan is a serious attempt to stop the wave of foreclosures and halt the decline in home values.
According to The Warren Group, a quarter of a million borrowers in Massachusetts fit the profile of not having enough equity in their homes to refinance. About half of them hold loans that are guaranteed by Fannie or Freddie. Across the country, more than 8.3 million mortgaged properties are underwater, according to a report released by First American CoreLogic.
The goal of the Obama plan is to help homeowners avoid foreclosure by restructuring or refinancing their mortgages. The program is currently scheduled to run until June of 2010.
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Update - $15000 Home Buyer Tax Credit Cut From Stimulus Bill
Copyright 2009 - Claudette Millette, President, TheBuyersCounsel - 800-392-1446, E-mail
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