Friday
Nov062009
$8,000 Homebuyer Tax Credit Extended and Expanded
Friday, November 6, 2009 at 2:37PM Entries in 2009 Economic Stimulus (3)
Friday, November 6, 2009 at 2:37PM Friday
Mar062009
Are Your Eligible For Stimulus Loan Modification or Refinance?
Friday, March 6, 2009 at 9:51AM The government has approved billions of dollars of aid to programs as broad as "renewable energy" and as focussed as bailing out the insurance giant AIG. Just this week the details of the administrations plans for helping the millions of at risk homeowners. The help is coming in the form of two initiatives: refinancing and loan modification. I won't go through the details of each but will touch upon the program highlights and point you toward some good resources on the web.
Refinancing Initiative:
You may be eligible if:
- You own and currently occupy at one to four-unit home.
- Your mortgage is held by Fannie Mae or Freddie Mac. To check go here To check click here.
- The amount you owe currently cannot exceed 105% of the current value.
- You must have stable income sufficient enough to support the new mortgage payments.
- If you would like to participate you can call the lender of your choice - you do not need to work with your current loan company and there are no "approved providers", so don't get scammed.
The refinance initiative is not designed for:
- Homeowners who are delinquent on their mortgage payments.
- Homeowners who owe more than 105% of their homes current value.
- People who want to get cash back from their refinance.
Loan Modification Program:
Requirements:
Wednesday
Feb182009
Mortgage Relief Plan Announced
Wednesday, February 18, 2009 at 3:59PM
President Obama has been busy over the past few days (not that the President is ever just sitting around). Yesterday he was in Denver signing the stimulus package. He was in Colorado 
highlighting the green technology movement which is huge here and mentioned that Boulder might be the first "smart grid city" in the nation. In fact Blake Jones from Namaste Solar in Boulder introduced Obama. He also took the President and Vice President on a tour of the solar panel installation on top of the Nature and Science Museum in downtown Denver (photo from the Rocky Mountain News).
highlighting the green technology movement which is huge here and mentioned that Boulder might be the first "smart grid city" in the nation. In fact Blake Jones from Namaste Solar in Boulder introduced Obama. He also took the President and Vice President on a tour of the solar panel installation on top of the Nature and Science Museum in downtown Denver (photo from the Rocky Mountain News).Today he was in Phoenix, a city greatly affected by the housing crisis, to sign the "Homeowner Affordability and Stability Plan".
The goal of the mortgage relief plan is to help avoid foreclosures by providing incentives and a framework for refinancing and loan modification for at-risk homeowners. The administration estimates that the plan will offer assistance to as many as 7 to 9 million homeowners.
The first part of the plan is to provide access to low-cost refinancing for responsible homeowners suffering from falling home prices. The fact is that even a well qualified homeowner cannot get a new loan these days without 20% equity in the house. This part of the plan allows for a waiver of the 20% equity requirement if that is all that is holding up a refinance which will lower payments.
The problem I see with the implementation of this first part is that the homeowners who really need the help will not be considered "responsible". Homeowners who have lost their job or those with poor credit will not qualify for this program.
The second part of the program provides a mechanism for at-risk homeowners to modify their mortgage payments to a reasonable level. This provision has some real promise to do some wide-spread good. If it works as written homeowners will be able to keep their homes, thereby reducing the negative impacts of foreclosures.
The goal is to reduce payments to between 31% and 38% of income. The program uses up to $75 billion to pay down, match and provide incentives to mortgage lenders and borrowers. Once a loan is modified the terms must keep the modified payments in place for a minimum of 5 years. For each modification the lender will receive and upfront payment of $1,000. They will also receive a payment monthly if the borrower stays current on the loan (not to exceed $1,000 a year for 3 years). Borrowers who stay up to date will receive an monthly balance reduction that goes straight toward reducing the principal balance on the mortgage loan.
For more complete details go to the following sites:
Plan Summary
Fact Sheet
3 Examples
CBS News Q&A
Overall I think it is a step in the right direction and I hope that the mortgage companies do not drag their feet too much in its implementation.