The Federal Government under President Barack Obama started a mortgage bailout program early in 2009 to help struggling home owners who were saddled with mortgages they could no longer afford. Included in the new plan was $75 Billion dollars which was allocated to help slow the alarming foreclosure rate in North America.
Can I Save My Home With The Obama Mortgage Plan
The answer is maybe but unfortunately the plan will not help every single troubled home owner! While the plan does set aside money to help people there are guidelines those people will need to meet. This is to make sure the tax payers are not giving a bailout to someone who will be back in the same situation within 12 months.
Who Will Qualify
First off the major part of the Obama mortgage plan was designed to help people that are holding Freddie Mac and Fannie Mae mortgages and not had any late payments but could take advantage of the lower rates. These people often have homes that have fallen in value well below what their current mortgage is. Under the Obama mortgage plan these people would be allowed to refinance up to 105% of the value of their residence with no penalties or special fees.The just need to have adequate loan payment history, good credit and sufficient income to qualify.
What If I Do Not Fit Into This Category
The President also realized that a lot of people struggling with the home loans had Sub Prime loans and had a troubled payment and credit history that would not allow them to refinance. To help these people the mortgage bailout plan offers a cash incentive to the lenders of these people to modify the terms, interest rates and payments of their home loans to make them more affordable. The plan recommends lowering the house payment to roughly 35 of a person gross monthly income and keeping it there for at least five years. This will let these people get back on track so they can refinance with a traditional mortgage in a few years.
