Obama Housing Plan: What You Need to Know
You’ve probably heard about the Obama administration’s plan to help millions of homeowners refinance or modify their mortgages. This column is meant to answer some of your questions on whether you qualify.
The Treasury Department released the broad outlines of its plan last month, but on Wednesday provided more details about how the plan will work.
The plan’s first prong may help up to five million homeowners who have been unable to refinance their mortgage because the value of their home has plunged and they now owe more than 80 percent of their home’s value. To get a new mortgage, borrowers had to either bring extra cash to the table to get back to 80 percent, or purchase private mortgage insurance, which has become more difficult to qualify for and often quite expensive.
The second part of the plan may help up to three to four million borrowers modify their loans. These borrowers can no longer afford their monthly payments and are close to defaulting, while others are on the brink of foreclosure.
The administration’s “Making Home Affordable” program offers mortgage providers with financial incentives to help these two groups, but to qualify, you need to meet certain requirements.
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