Obama Expands Foreclosure Program

• July 2, 2009

by Mark Wellborn

In a move that is sure to elicit criticism, the Obama administration announced yesterday that borrowers with mortgages worth up to 125 percent of their home’s value will be able to refinance under the administration’s program to aid foreclosure victims. The one hitch is that the homeowner cannot be behind on their mortgage payments.

The goal of this change is to help homeowners who have not been able to take advantage of the low interest rates that have been available in recent weeks due to the fact that the value of their property has dropped significantly. The program currently caps eligibility for the program to homeowners that have a loan-to-home value ratio of 105 percent. Many homeowners in the country are unfortunately well above that ratio.

The change will certainly draw the ire of people who believe that policies like this are the reason that we got into the housing mess in the first place. However, rising interest rates could be the real issue. The days of 4.8 percent interest rates are in the past, and refinancing has noticeably decreased in recent weeks. 30-year fixed rate mortgages are now back at 5.4 percent.

3 Comments

1. Jenna Camen said at 10:33 am on Friday July 3, 2009:

   If this program is to work I think that it might help stabalize home prices.  This would be good for everyone so that the people who are making their mortgage payments are not getting nailed.  I called http://www.MortgageRefinancing.com and they said they are excited about the program because they have so many homeowners that are under water on their homes.

1. jofabian said at 2:28 am on Saturday July 4, 2009:

   I own a condo and have an outstanding balance of $140k, consisting of $104k primary and $36k secondary. I took the home equity to consolidate debts. At the time the property was valued at $163k but now it is valued at $134k. I’m looking to sell because i am engaged and will be moving into my fiancee’s home. Check http://obamamortgage2009.blogspot.com/2009/03/obamas-mortgage-modification-do-you.html If I have a buyer who offers me within say $5-7k of the outstanding, can i agree to assume a loan on the residual and pay the bank the difference over time with interest? The same bank holds both mortgages.

1. loispoor said at 6:13 am on Monday July 6, 2009:

   If anyone has had any luck with any of these companies, could you please post it for the ones that cannot find one to work with you. We’ve almost lost once and just got a second chance that want last long so I need to get something done now, so if anyone knows the right number to call, i am sure a lot of people that hasn’t found them would appreciate it but check out http://obamamortgage2009.blogspot.com or obamamortgage2009.blogspot.com