Business and Finance

Obama mortgage modification program is the most significant initiative of the government. It was designed with the aim, to help Americans save their homes. MHA (Mortgage Home Affordable) provides the opportunity to the home owners to get their loan modified. The borrowers counted on selling off their home due to the prevailing economic situation in the country. Although the property prices would continuously increase but the buyers would vie the property. In such a situation MHA helped the borrowers by offering mortgage loan refinance option.

Most of the home owners, under financial difficult situation, want to keep their home. To do so, they would need help. Theloan modification companies can help to get the loan modified according to one’s requirements. To begin with, one should inquire about the reductions that can be done in the principal amount. However, one can save almost equally, with the reduction in the interest rate.

Obama’s governmentloan modification program, is greatly helping the Americans to save their homes. It supports the home owners to modify their loans and avoid foreclosure. Under the head of this new program, the borrowers would not spend more than 38% of their income to fix the new affordable monthly payments, during loan modification. Due to this a number of knock off have been saved.

With the current financial situation, people land up with less disposable income, the staff has to be scaled down. Hence the borrowers have to depend on some financial assistance that can be availed from some lending institute. As a result of several government policies that have been recently introduced, the process of automatic foreclosure is no more in action. Besideshome loan modification, there are several grants and funds that are made available by the government to the borrowers. The government has offered new grant of $75 billion.

Regina Edwards is a 40 year old Black woman with 6 children who has lived in north Minneapolis for the last 6 years. Regina is dying of Pancreatic Cancer. The doctors say they cannot operate. 2 out 10 people get this cancer but by the time it’s diagnosed, it’s too late. In the mix of it all her furnace is not working, her house is cold, and she has no food in her refrigerator due to her electricity being cut off. As we speak, (during this interview) she’s getting ready to go to chemotherapy at North Memorial Hospital. There is no one but her 18 year old daughter to take care of the siblings. No relatives, no grandparents…no one.

Regina has been a political activist and worked at the Urban League of Greater Madison and the City of Madison. She also has worked for the International Culinary School in Burnsville, Minnesota and graduated from Minneapolis Community Technical College in May with a degree in Culinary Arts. Regina’s path to education, wealth and independence was tracking in the right direction.

But there’s a lot more to Regina’s story. Besides having her new home robbed by the people who lived there before, after the landlord gave her the key without changing the locks the day before Thanksgiving, there has been a list of events that have happened to Regina that she needs to let out. So let’s start with the Minneapolis Urban League. Regina says she knew things where strange at the Minneapolis Urban League when the leadership was like, “the Pink Panther,” says Ms. Edwards, “These people don’t want to address any issue other than their paychecks. They creep around as if they are invisible.”

Continue reading ‘A Dying Mothers Plea to the Minneapolis Urban League Falls on Deaf Ears’ »

With Obama’s Home affordability plan in execution since March, 2009, hopes of many disheartened homeowners have been restored. However, there are many apprehensions regarding the efficacy of the plan. “How will the plan lower mortgage payments?” – is the most prevalent question. Let’s understand the procedure in detail.

There are two parts of the Obama Home affordability plan. One is refinancing, and the other is loan modification. With the sharp fall in property rates, many homeowners could not avail a refinance because their loan-to-value (LTV) ratios are too high for them to meet the criteria for a refinance. However, under the Obama Home affordability refinance plan, homeowners with an upside-down loan can also avail for refinance. People with a variable interest rate home loan can shift to fixed rate loan with lower interest rates than the current loan’s. Such a low-cost mortgage refinance loan will save those thousands of dollars annually.

Homeowners who do not meet the eligibility criteria for refinancing can apply for mortgage loan modification. People have lost jobs or have encountered cutbacks in paychecks due to the economic slump. So, the monthly mortgage payments take up a chunk of their income. The home loan modification program assures that the monthly payments do not surpass 31 percent of an individual’s monthly income. Borrowers can avail for interest rates as low as two percent, and repayment duration as long as 40 years. Hence, low monthly payments are guaranteed. The principal amount in not reduced under the plan though. Lenders are not forced to participate in the program. However, the program is, in most cases, more profitable than foreclosure. Hence, they choose to modify the mortgage. There will be a three-month trial period with the new loan terms. If the homeowner is still current at the end of the ninety days, the modified terms stay in effect for the next five years. An interesting incentive for borrowers is that they can receive up to $1,000 for five years as long as they stay current on their payments. However, the money is used to pay down the balance on their loan. It is not handed over to the homeowners lest they spend it away.

Obama’s $75 million Home Affordability and Stability Plan is a rescue attempt to save the plummeting housing market. The President has the conviction that by restructuring their mortgages, homeowners who are struggling to make ends meet, will be able to save their homes. This initiative comprises of two parts:

1. Home affordability refinance program – this program helps homeowners to refinance loans that went upside-down because of the tumbling property rates.

2. Home affordability loan modification program – this program is designed to reduce mortgage installments for people facing foreclosure by modifying their mortgages, and reducing payments.

Many homeowners are not eligible for refinancing according to the Obama mortgage plan. Hence, the home loan modification plan has become more popular. The eligibility criteria to apply for loan modification include possessing and occupying a one to four unit home, having a loan that originated before January 2009, and having a due principal balance equal to or less than $729,750 for a single-family property. If an individual does not inhabit the house, then he/she will not be eligible to apply for the Obama mortgage plan. Also, the figure $729,750 is very important. The total loan amount may exceed this number. However, the principal amount to which no interest is added, should not exceed this figure. Moreover, subordinate loans and second mortgages may not be included in this amount.

If the house is a multi-unit property, the limits may go higher. If the mortgage is applied on a four-unit property, and the owner occupies it too, then the limits can be higher according to the HUD rules for the Obama mortgage loan modification scheme. There are a few other requirements to apply under Obama mortgage modification. The monthly mortgage payment should exceed 31 percent of the individual’s gross monthly revenue. And the applicant must also be able to show a significant rise in income or fall in expenditures that have enabled the applicant to pay the FHA home loan or other mortgage.

Under this plan, interest rates can be lowered to as low as 2 per cent, and the duration of the mortgage repayment can be extended to a maximum of 40 years. Also, the service providers will be required to reduce the monthly payments to less that 31 percent of the gross monthly income. This will considerably lower mortgage payments. Reduction in payments can greatly benefit people who were on the verge on losing their homes, and stop foreclosure. They can start making their payments regularly. Save home – Avail the benefits of Obama Home Affordability plan.