Yesterday, President Obama signed into law the latest stimulus bill American Recovery and Reinvestment Act. Today, he will be at Dobson High School in Mesa discussing his “Homeowners Affordability and Stability Plan.”
He doesn’t take the stage for another 30 minutes but details are available through a Q&A on the White House blog. There’s also a downloadable PDF with a couple of different scenarios included.
The overall goal is to modify loans in manners that allow homeowners to remain in ther homes rather than face foreclosure. Eligibility is limited to mortgages on primary homes (no second, vacation or investment properties) and appears to be limited to situations where the first mortgage is no more than 105% of the value of the home.
You don’t need to be behind on your payments to be eligible.
Unless I’m reading it wrong, this leaves out buyers in the Phoenix real estate market’s hardest hit markets as homes there have decreased far more significantly.
Also, the program is limited to loans that are held or were securitized by Fannie Mae or Freddie Mac. If you don’t know if your loan applies, you’re encouraged to contact your lender after March 4 to find out – that is the date the program begins.
More details as they become available …
UPDATE (10:32 a.m.): CNN has posted its story about the plan. Apparently, I wasn’t reading the 105-percent limit incorrectly:
The plan would help borrowers who owe more than 80% of their home’s value to refinance and reduce their monthly payments. Lenders generally won’t refinance people who have less than 20% equity in their homes.
But only those who are current on their payments and whose loans are held or guaranteed by Fannie Mae and Freddie Mac are eligible. Also, the new mortgage, including refinancing costs, can’t exceed 105% of the current market value of the property, excluding many of the hardest hit. So if your mortgage is $210,000, your property can’t be worth less than $200,000.
Obama says this plan can help up to 9 million homeowners. Time will tell.
[tags]Phoenix real estate[/tags]
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