Many private market lenders have since followed the Administration’s lead by extending their unemployment forbearance period to twelve months as well. Previous mandatory periods were inadequate for the majority of unemployed borrowers, and providing the option for a year of forbearance gives struggling homeowners a substantially greater chance of finding employment before they lose their home. Providing out-of-work Americans the opportunity of delaying mortgage payments for a year while they get back on their feet: Lenders must extend the forbearance period for unemployed homeowners with FHA loans from four to twelve months.Expanding use of principal reduction for eligible borrowers: The Administration expanded principal reduction through the national mortgage settlement and tripled incentives for lenders to reduce principal balances for mortgage loans.This has collectively helped approximately 350,000 families and contributed to 1.7 million coming above water on their mortgages in 2012.And for those homeowners for whom homeownership is no longer affordable or desirable, the program can provide a way out that avoids foreclosure. Homeowners can lower their monthly mortgage payments and get into more stable loans at today's low rates. Helping more than 6 million families stay in their homes through modified mortgages: The Making Home Affordable Program is a critical part of the Obama Administration's broad strategy to help homeowners avoid foreclosure, stabilize the country's housing market, and improve the nation's economy.In addition, the President asked Congress to pass universal refinancing legislation so that any homeowner who is current on their payments can refinance at today’s low rates and save about $3,000 a year. More than 2 million families have refinanced through the Home Affordable Refinance Program (HARP) and more than 1.1 million families have refinanced through FHA's streamlined refinancing program. Helping families refinance their mortgage to save thousands of dollars each year: The Obama administration has made it easier for borrowers who are current on their federally backed mortgages-including those who owe more than their homes are worth- to take advantage of refinancing at today’s historically low interest rates.That’s why, since President Obama’s first days in office, his Administration has taken the following actions to strengthen the housing market and help responsible homeowners affected by the recession regain the stability and security they had in their homes: They also found themselves unable to refinance at lower mortgage rates. Millions of responsible families who had made their monthly payments and had fulfilled their obligations saw their property values fall. These reforms hold Wall Street accountable and ensure that responsibility is rewarded and everyone, from Wall Street to main street, plays by the same rules.įour years ago, stress in the financial system had severely reduced the supply of mortgage credit, limiting the ability of Americans to buy homes or refinance mortgages. And to protect consumers from unfair practices and prevent lenders from taking excessive risks, President Obama overcame a furious lobbying game from the big banks and intransigence from Congressional Republicans to pass and sign into law the most sweeping financial reforms since the Great Depression and established a new watchdog to enforce the strongest consumer protections in history. To address this crisis, President Obama and his Administration have taken a broad set of actions to stabilize the housing market and help responsible American homeowners. The housing market suffered a dramatic collapse caused by irresponsible lenders who tricked buyers into signing subprime loans and in some cases irresponsible homeowners who took out loans they knew they could not afford.
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