Wondering Where Your Bail-out is? Well here you go...

Real Estate Agent with High Lakes Realty and Property Management

Been paying your mortgage on time, even despite struggling to just to make ends meet?  Are you already late on your payments and barely hanging on?  If you're wondering where your "Bail-out" is, well here you go! 

The Homeowner Affordability and Stability Plan, recently announced by the Obama Administration, may be the very thing that many of us have needed.

There are two separate parts to the plan: a refinancing initiative and a loan modification plan.

The Refinancing Plan allows some homeowners to refinance their loans that are backed by either Fannie Mae or Freddie Mac.  Homeowners must owe between 80 and 105% of the property's current value and they cannot have been more than 30 days late on their mortgage payments for the last 12 months.

The Loan Modification Plan helps homeowners that are already late on payments and/or are in danger of going into default.  If you have suffered a serious hardship such as an interest rate hike, high mortgage debt-to-income, a sudden decline in income, being upside-down on your loan (owing more than the house is worth,) or can demonstrate reasons why you might be in danger of going into default, you should qualify.  (As long as you don't owe more than $729,750.

If you do qualify for the LMP, the government would lower your payment to 31% of your current monthly income.  How's that sound?  For some of us, this is an absolute Godsend.

Here's how it works:  Your monthly payment is lowered to 31% of your monthly income (including taxes and insurance) and then every five years, the interest rate increases 1%, but never exceeds your current interest rate!  In other words, you enjoy substantial savings now, when you need it, and don't have to worry about your payment ever increasing beyond what it is now.

The program is designed to help homeowners that did not knowingly purchase homes that they could not afford; rather, it is designed to offer assistance to those who made honest purchases and are now in need of help.  Unfortunately, the program offers no help to those who are unemployed or for those who cannot demonstrate any means of making a reasonable payment. 

Want another reason to buy a home in 2009?  How about an $8000 tax credit?  Buyers purchasing homes between January 1, 2009 and November 30, 2009 who make less than $75,000 per year (or $150,000 per couple) and haven't owned a home in the last three years (first-timers) can qualify for the credit.  These buyers do have to stay in their home for at least three years or will be required to pay it back.

Got questions?  Want to do a little research?

Here's a link to the White House where the plan is discussed in detail:


Here's a link to a summary of the program provided by the US Treasury:


Of course, your current lender should be able to provide you with all the information you need to help determine if you qualify and how to proceed.

If you've been hearing about all the bailout money going to the banks and super corporations like AIG and have been wondering.."Where's my Bailout?", well this might very be the help you've been looking for. 

Fred Jaeger is a licensed Oregon Real Estate Broker and an e-PRO Certified Realtor® affiliated with RE/MAX Sunset Realty Sunriver/La Pine.  He can be reached directly at 541 598-5449 or fred@fredjaeger.com .

Comments (1)

Tom Boos
Sine & Monaghan Realtors, Real Living - Grosse Pointe Farms, MI
Providing the very best of service to Sellers and

My only hope is that all of these bailouts will somehow trickle-down to bailout Realtors like myself!

Mar 20, 2009 03:15 AM