In an effort to help homeowners prevent foreclosure, Making Home Affordable, will offer assistance to as many as 9 million homeowners. The loan must have been originated prior to January 1, 2009 and the unpaid principle balance cannot exceed $729,750. The plan will allow homeowners whose homes have lost value to refinance to receive a lower rate or to get rid of the dreaded ARM. Borrowers can't owe more than 105% of their homes current value. The Colorado Springs Gazette Telegraph reports today that 25,814 or 20.3% of all homeowners have negative equity. Since our median home price declined 16.6% in 2008, one wonders how many will actually qualify for the modification. Lenders must agree to reduce payments to 38% of the borrower's monthly income. We can only hope that this plan will be readily available and not as impossible as a short sale. The jury is still out and only time will tell if this program will help homeowners as well as stabilizing the market.
You can review the summary of this by clicking on the following link. http://www.treas.gov/press/releases/reports/guidelines_summary.pdf
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