Yesterday, the Obama Administration released details of its plan to stabilize the housing market by helping as many as 9 million homeowners modify or refinance their mortgages.
The "Making Home Affordable" housing plan is intended to help those who have acted responsibly. "It will not reward folks who bought homes they knew from the beginning they would never be able to afford" said President Obama. The administration's housing plan has two main parts. The first part is to help those on the brink of foreclosure modify their mortgages. It is intended to help those who can no longer afford their monthly mortgage payments due to an increase in their interest rate, a reduction in their income perhaps due to a job loss, or they are experiencing a financial hardship. For those homeowners who meet one of the requirements the next step would be to visit The Treasury Department's website www.FinancialStability.gov/MakingHomeAffordable. The website has an assessment tool where homeowners can answer some questions to find out if they are eligible. Those who think they meet the requirements will need to prove their eligibility by submitting documents such as their tax returns, pay stubs, credit card balances and statements about any other outstanding debts.
The second part of the program aims to help 4-5 million people refinance to lower interest rates. Only mortgages that are held by Fannie Mae or Freddie Mac are eligible.
Details of the eligibility requirements for both programs are available on the government's website: www.financialstability.gov/.
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