Obama's Stimulus Package For Mortgage Refinancing and Loan Modifications Incen

[Grace Perry]

The US government under Obama's leadership have produced a stimulus
package for mortgage refinancing programs designed to assist people
who are facing foreclosure on their homes. The loan modifications
incentive is primarily geared towards people who are struggling with
mortgages on their homes and is not really intended to help out people
who have houses sitting empty.
There are 2 options available, providing the criteria for qualifying
for the packages are met.
Mortgage Refinancing
This is where an existing mortgage that is owned or guaranteed by one
of the two large lending agencies Fannie Mae (Federal National
Mortgage Association or Freddie Mac (Federal Home Mortgage Corporation)
can be refinanced to take advantage of lower rates of interest. The
qualifying criteria: -


The loan is not more than 105% of the house valuation
You are up to date with your repayments
Your circumstances have not changed to the extent you will not be able
to afford the lower payments e.g. you still have an income that is
enough to meet the payments

Loan Modifications
This is where you change the terms of your current loan (mortgage)
through your existing mortgage company providing that they are
participating in the program and that you meet the qualifying
criteria: -


Your total payment that includes interest, taxes and insurance is more
than 31% of your gross income.
The mortgage must be on your principal family home where you are
currently living
Your mortgage balance is not greater than $729,750
You got your mortgage before the beginning of 2009 i.e. not on or
after the 1st January 2009.
You will also be required to make the modified payments over a trial
period of 3 months to prove you can finance the new deal