Mr. Obama has released a new comprehensive plan to address the housing woes and has thus helped to ease the burden on millions of families who have been hit by the recession. This new program boasts of reducing the number of foreclosures in the future along the lines of adopting loan modifications, or through refinancing and some other forms of assistance.
Experts have been in a dilemma regarding the actual assistive nature of the plan, and whether it will affect the home owning public in a good way. Following is a gist of what this new plan means for the home owning public in general and how it will affect their finances.
The key element – loan modification
Loan modification has surfaced as a life savior for people who have found themselves in deep financial troubles. It has proved to be a promising fix for such people and have helped them negotiate a better deal with their lenders allowing them to have flexible and easier mortgage payments. This new program has allowed loan modifications for only at-risk borrowers. These come under the category of people who spend more than 38% of their income on mortgage payments. This program allows the restructuring of the interest rate by lowering it, or any option which proves to be feasible and in the borrowers interest.
The program boosts the bankruptcy loan modifications further. According to this plan the courts can modify the mortgage loans on properties which are used as primary residences. This can also be seen in the light of principal reductions.
State backed refinance – a life savior.
Under this financing scheme, the borrowers who have conforming loans can get a better deal for themselves. This means that they can have better terms of their loans. This can mean that your lender can offer you loans at an even lower rate. The only key requirement for this is the current occupancy and the household income proof.
This scheme really helps the lot of people whose homes have depreciated in value over time and have been devalued at a lower price. With this plan people with no or little equity can also qualify for refinance.
Social media description: Clear the buzz around Obama’s loan modification housing plan and get to know it better.