Obama's Making Home Affordable Program

With the current state of the economy and housing market (not good) millions of families who were making their payments and honoring their debts have seen their property values fall, preventing them from refinancing at a lower rate. This is because some studies show that a foreclosure can lower the value of nearby houses by up to 9%. It doesn't help that millions are being laid off or having their hours reduced. Because of this there are up to 6 million families that are threatened by foreclosure over the next few years.

So. The Making Home Affordable program, brought to us by President Obama will assist 7 to 9 million homeowners, provided they were making efforts to make payments on their mortgages. It will also try to dampen the effects of the crisis on both families and communities. This program is not open to speculators but ONLY to homeowners who were making good faith attempts to keep up with their mortgage.

The plan will support low mortgage rates as well as making up to 5 million mortgage holders eligible for refinance, and up to 4 million eligible for a lower monthly payments. Obama is uniting lenders, investors, borrows, and loan service providers. In an effort to help Americans stay in their homes.

Included in the Making Home Affordable plan is something called The Home Affordable Modification Program, designed to prevent foreclosures. It provides clear guidelines for loan modification, requiring recipients to use these guidelines, allows legal modification of mortgages during bankruptcy, and gives support to local communities.

Who may qualify? Homeowners suffering hardships that have put them at risk because of lowered income, expense increases, high mortgage debt compared to income, people upside down in their mortgage; anyone suffering from risk of foreclosure may qualify for a loan modification. Eligibility for the program ends after 3 years.

A homeowner won't necessarily have to be behind in payments to qualify either. Loan modifications work best if they are made before the borrower falls behind. Also, only homes occupied by their owners will qualify and no mortgage larger than the FHFA conforming limit of $729,750 will qualify. This is for homeowners, not speculators.

Loan modification providers will also benefit from the program, receiving a fee for each modification that meets the guidelines the plan establishes. There is also a financial incentive offered to mortgage holders of $1500 who make a loan modification while they are still current in their monthly payments, though at risk of default. Also, after the modification, borrows are eligible for up to $1000 a year for 5 years provided they stay current on their payments.