Amid much controversy and partisan positioning, the economic stimulus package was recently passed into law and is one of the first large pieces of legislation passed by the new Congress at the behest of President Obama. How will the bill effect your mortgage?
Like any bill, there was a lot of wrangling and negotiating involved with getting it passed, but along with attempting to get the economy moving, the package also included several components designed specifically to help those who are struggling with their mortgages.
Below are a few of the basic tenets of the stimulus package as it relates to mortgages, but if you are struggling to keep your head above water with your home loan, don't attempt to work through it by yourself, contact a professional to ensure you take full advantage of the opportunities offered to you.
At the onset of the current economic crisis, the only people who could apply for a mortgage modification were those who had at least 20% equity in their homes. Clearly, this precluded not only the majority of those who needed help but also those who needed help the most. As of now, anyone whose mortgage amount is more than 105% of their home's current value is allowed to apply for a mortgage modification.
Freddie Mac and Fannie Mae
"Freddie and Fannie," as they're commonly called, have been entities that basically served as the conduit by which the federal government guaranteed certain home loans in an effort to spurn growth in homeownership rates. Now that these companies have failed, the stimulus package has created the opportunity for anyone who has a loan from these entities to apply for a loan modification.
Gross Income Percentage Ceiling
The package also states that modified mortgages cannot include monthly payments that exceed 31% of the borrower's gross income, which is clearly a strategy to allow the borrowers to stay current with any restructured payments.
The stimulus package also calls for lower mortgage rates on all loan modifications. For a time, that interest rate was set at 6.5%. The stimulus package changes that interest rate to a much lower 5.16%.
Finally, President Obama is looking to offer a $1,000.00 incentive for anyone who chooses to pursue and obtain a loan modification instead of a short sale or bankruptcy. Therefore, there are Arizona loan modification options available to those who are struggling with their home loan payments based on the new package. However, you need to take action and work with a professional in order to make sure that you're taking advantage of everything that these new ideas have to offer. Contact the firm today to get your mortgage loan modification process started today at www.azhomeloanhelp.com/
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