How to Avoid Foreclosure: A Mortgage Relief Plan
The number of foreclosure properties has been continuing its ascend for some time now that the problem becomes a blight in the Obama Administration’s efforts to revive the country’s economy.
Several strategies and programs have been created to address the rising tide of foreclosure properties in order to stabilize the housing market towards the country’s economic recovery.
The federal government’s “Making Home Affordable” mortgage rescue plan is designed to help millions of distressed homeowners avoid losing their homes to foreclosures.
As of February 2008, more than 290,000 housing units were on the verge of becoming foreclosure properties, an increase of 30 percent from the previous year. This means that one in every 440 homeowners received foreclosure notices, a 6 percent increase from the January 2009 figures.
Arizona, California and Florida still lead the states with highest number of foreclosure properties in February 2009.
Most everyone hoped that the federal government’s foreclosure properties prevention plan will reduce distressed homeowners’ monthly mortgage payments to allow them to continue paying their loans to avoid losing them to foreclosure.
Housing experts are putting much on the Obama Administration’s refinancing and loan modification programs to help millions of distressed homeowners.
Distressed homeowners who previously failed to qualify for loan refinancing because the market value of their properties were below the required amount may have the chance of qualifying under the current foreclosure properties prevention plan. Qualifying may give them the advantage of lower interest rates and affordable monthly payments.
To qualify for refinancing, homeowners must have mortgages that are owned or backed by Federal Home Loan Mortgage Corp. and Federal National Mortgage Association.
Homeowners must declare their distressed homes as their primary residences. They must not be behind on their loan payments for more than 30 days.
Furthermore, distressed homeowners’ mortgages must not be more than 105 percent of their houses’ market value.
The loan modification component of the foreclosure relief plan allows mortgage lenders to lower the interest rates on loans by 2 percent, defer or lower principal for affordable payment and extend loan terms.
To be eligible, payments made before the modification must not be more than 31 percent of borrowers’ gross monthly income.
For owners of single-unit homes, they must have unpaid balances on their principal of not more than $729,750 to be able to qualify for loan modification.
Related Posts:
- A Perspective on the Foreclosure Control Initiative
- Obama’s Foreclosure Prevention Plan Short on Details
- Anti-Foreclosure Homes Plan: Benefits Outweigh Limitations
- Mortgage Modification Most Effective Way to Combat Foreclosures
- Help for At-Risk Loans to Reduce Foreclosure Properties
