Details of Obama's Foreclosure Plan

• March 4th 2009

by Mark Wellborn

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The guidelines for President Obama’s foreclosure prevention program were released today, and the Washington Post’s Renae Merle has coverage here.

The main goal of the program is to help homeowners lower their mortgage payments. Lenders can start modifying their loans immediately, but to be eligible, the loan needs to have originated on or before the first of this year.

From the WaPo:

“The program will end in December 2012, and loans can be modified only once under that part of the program. It applies to first lien mortgages with a principal balance of up to $729,750.

Under the program, troubled homeowners can have their interest rate reduced as low as 2 percent to make their payments affordable, which is defined by the administration as 31 percent of their income. The program lavishes incentive payments on the lenders to encourage them to modify loans.”

The Homeowner Affordability and Stability Plan also includes sections to help homeowners who have not been able to refinance because of the small amount of equity they have in their home. However, in order to qualify for this part of the program, homeowners must have mortgages owned or financed by Fannie Mae or Freddie Mac.

For full details on the plan, click here.

This article originally published at https://dc.urbanturf.com/articles/blog/details_of_obamas_foreclosure_plan/615.