Obama mortgage relief: Do I qualify for a mortgage relief program?

Obama mort­gage relief: Do I qual­ify for a mort­gage relief program?

Here’s a look at who qual­i­fies for a mort­gage refi­nance under Pres­i­dent Obama’s new home-foreclosure relief plan.

By Mark Trum­bull, Staff writer / March 26, 2010

Do you qual­ify for help under Pres­i­dent Obama’s lat­est fore­clo­sure pre­ven­tion effort, announced Friday?

Obama mort­gage relief to help with home foreclosures

Mort­gage delin­quen­cies may be peak­ing, but hous­ing mar­ket far from nor­mal Finan­cial prod­ucts that aid the poor and beat the mar­ket Here’s a quick take on who may be eli­gi­ble under the new home-loan pro­grams, which include aid to bor­row­ers who become unem­ployed and incen­tives for lenders to reduce loan bal­ances for under­wa­ter bor­row­ers. The infor­ma­tion comes from Obama admin­is­tra­tion state­ments and a Fri­day analy­sis of those plans by econ­o­mists at Gold­man Sachs in New York.

Three months of mort­gage relief for the unemployed

For three months, job­less mort­gage hold­ers get tem­po­rary for­bear­ance on their mort­gage loan. They’ll still have to pay 31 per­cent of their monthly income, but not the full amount they usu­ally have to pay each month on the loan. Loan ser­vicers par­tic­i­pat­ing in the Mak­ing Home Afford­able Pro­gram – which includes many big lenders – are required to offer assis­tance to all job­less bor­row­ers who meet eli­gi­bil­ity criteria.

To be eli­gi­ble, you must show that you are draw­ing unem­ploy­ment insur­ance ben­e­fits, that you live in the home, and that the loan was orig­i­nated before Jan. 1, 2009. The loan bal­ance must be below $729,750. You can’t be more than 90 days delin­quent in your payments.

FHA refi­nance loan

Par­tic­i­pa­tion in this Fed­eral Hous­ing Admin­is­tra­tion pro­gram is vol­un­tary, with the gov­ern­ment pro­vid­ing incen­tives to encour­age lenders to offer prin­ci­pal (loan bal­ance) relief to bor­row­ers at high risk of fore­clo­sure. The tar­get group is bor­row­ers deeply “under­wa­ter,” with loan bal­ances far above the cur­rent value of their home. The idea is to get a win-win out­come, where bor­row­ers stay in their homes and lenders don’t lose as much as they oth­er­wise might by foreclosing.

Lenders must agree to reduce the prin­ci­pal bal­ance by at least 10 per­cent on a first-lien mort­gage. After refi­nanc­ing, the first mort­gage can’t be larger than 97.75 of the home’s value (the cur­rent FHA limit) but the total loan-to-value ratio (with a sec­ond lien) may be as high

via Obama home-foreclosure relief: Do I qual­ify for a mort­gage refi­nance? — CSMonitor.com.