Obama's Mortgage Rescue Plan

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On March 4^th 2009, the Obama administration officially launched a new mortgage relief plan known as the Homeowner Affordability and Stability Plan and announced a new set of rules for modifying loans that will help 9 million struggling homeowners avoid foreclosure. This is the first phase known as part 1 of the Obama mortgage rescue plan to battle the foreclosure ridden nation. The 2^nd part of the plan will be revealed by the White House in the very near future.

 

President Obama has now officially set aside a $75 billion fund of taxpayer money to support this new program that will help homeowners reduce their monthly mortgage payments. The $75 billion fund will be used as incentive to subsidize lenders to lower monthly mortgage payments for struggling homeowners/borrowers. To learn more about how this program works and detailed requirements for eligibility, please visit our updated loan modification/refinance option.

 

Here are the main highlights of President Obama’s official rescue plan to saving home foreclosures.

 

Mortgage Relief

The plan contains 2 separate programs targeting 9 million homeowners.

 

• The 1^st part of the plan allows 4-5 million borrowers refinance through the government sponsored mortgage giants, Fannie Mae and Freddie Mac.

• The 2^nd part of the plan is the establishment of a $75 billion fund to subsidize lenders so as to help reduce homeowners’ monthly mortgage for borrowers who have seen their properties fall in value through Loan Modification.

• Establishment of standard uniform rules for loan modification for the entire mortgage industry.

• Bolstering and supporting Fannie Mae and Freddie Mac by buying up more of their shares.

• Allow Fannie Mae and Freddie Mac to hold up to $900 billion worth of mortgage-backed-securities, a $50 billion increase.

• Installment of a 3 month moratorium on foreclosures for homeowners acting in good faith. Troubled financial institutions who have received funds from the Treasury’s Troubled Asset Relief are required to participate in this program.

• A new mortgage tax credit in the amount of 10% of the mortgage interest will be passed to aid struggling homeowners.

 

Please note that this rescue plan is intended for responsible homeowners or borrowers who have experienced plummeting value of their home or a popular real-estate termed as ‘underwater’. This plan will not benefit real estate speculators or investors but rather responsible borrowers and families who currently occupy or live in their homes.

 

Change in Bankruptcy Laws

 

President Obama will change the bankruptcy laws to enable families stay in their homes. Currently, individuals who own several homes benefit from bankruptcy judges writing down any or all of the debt on their multiple homes. President Obama will ammend the unfairness of this law to also include primary residents (individuals or families who own and live in their single home).

 

Tackling Mortgage Fraud

 

New laws are set to install tough penalties against predatory lending and punish those who indulge in fraudulent lending hurting hard working Americans. Obama introduced the STOP FRAUD act in the Senate and plans to boost funding for law enforcement programs by $40 million for the purpose of cracking down housing fraud.

 

Lending professionals are required to report any suspicious or fraudulent activity. Obama is also in support of establishing a database of debarred mortgage professionals that will enable potential borrowers verify the credentials of lenders they are doing business with. Learn to protect yourself and your family by visiting our important section of foreclosure scams.

 

To make it easier for borrowers to compare different loans, President Obama proposed to establish a standardized estimate of the total annualized cost of a mortgage loan so as to protect consumers from abusive predatory lending practices.