Obama said he wants to expand the existing Home Affordable Refinance Program (HARP) federal program. The current plan only covers borrowers whose loans are backed by Fannie Mae and Freddie Mac. Under the new proposal, the plan would include loans not backed by these organizations. He estimated that the borrowers would save $3,000 a year in mortgage costs.
The key points of the Obama proposal are:
· Open up federal refinance assistance to more underwater homeowners
· Restrict mortgage services in their ability to foreclosure until after exhausting all good-faith effort to modify loans
· Bulk foreclosure sale to investors to reduce inventory of foreclosed homes.
To qualify, the homeowner could only have one mortgage payment delinquency in the past six months with a loan amount that falls under the FHA loan limit guidelines for their location. The homeowner would provide a modified loan package with verification of employment. The lenders need to agree to reduce the loan balance for homeowners who owe more than 140 percent of the value of their home.
The proposal also includes a Homeowner Bill of Rights for lenders and borrowers. This piece of the proposal calls for full disclosure of fees and penalties, protection for families against inappropriate foreclosure, support for responsible families, and a simple mortgage disclosure form. It also includes guidelines to prevent conflict of interest.
Andee Allen is freelance writer, Real Estate Investor, Business Consultant, and California Realtor (License #01854926). You are encouraged to contact Andee at firstname.lastname@example.org or on her websitehttp://www.andeeallen.com