President Obama announced Wednesday that he will be making $75 Billion available to help 9 million homeowners who are facing foreclosure.?? Obama declared the need for drastic action in the face of the growing economic crisis and stated that the funding will help to keep the housing crisis from wreaking further havoc on our already fragile economy.
The government is also backing Mortgage Giants Fannie Mae and Freddi Mac with over $400 Billion in an effort to encourage them to start re-financing loans that are upside down, that is homes whose market value has sunk below the amount left on the loan.
Success from the life line is far from certain even though the administration is loosening refinancing restrictions for many borrowers and providing incentives for lenders in hopes that the two sides will work together to modify loans. But no one is required to participate.
Complicating matters, investors in complex mortgage-linked securities, who make money based on interest payments, could still balk, especially those who hold second mortgages or home equity loans. Their approval would be needed to prevent many foreclosures.
The ultimate goal is to lower homeowners mortgage payments to less than 31% of their total income, but that depends on lenders who are already leery of extending new loans in the current unstable market.
President Obama is also supporting legislation that will allow bankruptcy judges to chage the terms of mortgages, a measure that is currently opposed by major lenders and the banking industry.
If you are looking for help negotiating with your lender contact MBA Commercial or call Toll Free, 800-958-1952 and listen to our recorded message available 24 hours a day.
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