Blog Articles from Allegiant Mortgage, LLC

$275 billion Home Foreclosure Plan

March 5th, 2009 2:35 PM by

President Obama announced a plan on Wednesday to help as many as nine million American homeowners refinance their mortgages or avert foreclosure, saying that it would shore up housing prices, stabilize neighborhoods and slow a downward spiral that was “unraveling homeownership, the middle class and the American Dream itself.”

For example, a Tennessee homeowner with a $210,000 loan on a home worth $200,000 could qualify under one key component of the program, which allows lower-interest refinances of mortgages on owner-occupied residences at up to 105 percent of equity.

The plan has three components. The first would help homeowners who are still current on their payments, but who are paying high interest rates and cannot refinance because they do not have enough equity in their homes.

A second component would assist about four million people who are at risk of losing their homes. It would provide incentives to lenders who alter the terms of loans to make them affordable for the troubled borrowers. A third component would try to increase the credit available for mortgages in general by giving $200 billion of additional financial backing to Fannie Mae and Freddie Mac.

What does this mean for Tennessee homeowners?  Not everyone is going to be able to be bailed out by this plan, but in many cases, families can be given a second chance to refinance and keep their homes.  In some cases, a family's monthly payment could be reduced to as little as 31% of its gross monthly income.

Posted in:General
Posted by on March 5th, 2009 2:35 PM

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