Homeowners with Second Mortgage Can Also Benefit With Lower Mortgage
Previously launched Obama’s making home affordable plan helped the homeowners facing mortgage foreclosure on a primary mortgage only. About half of these numbers have a Second Mortgage.
The economic downturn has made many homeowners struggle with their monthly mortgage payments. You may be one of them who fear defaulting with payments in the near future. Your financial situation may be bad enough preventing you from taking advantage of a conventional refinance. However, other alternatives of Obama Mortgage Assistance Program can open up to you that you can consider. Loans Store offers mortgage refinance and the services of mortgage attorneys nationwide to help people who are considering a short sale or facing mortgage foreclosure.
It is a widespread belief that homeowners struggling to make mortgage payments and realize that they can no longer afford their home must accept mortgage foreclosure or a short sale. But Obama’s plan can still help them to come out as winners. President Obama expanded his $50 billion package to include homeowners who think it best to consider a short sale or facing mortgage foreclosure due to financial constraints. The plan means to integrate this group of homeowners.
The Second Mortgage Holders
Previously launched Obama’s making home affordable plan helped the homeowners facing mortgage foreclosure on a primary mortgage only. About half of these numbers have a Second Mortgage. Officials realized that unless they were helped, the Homeowner Affordability and Stability Plan could fail. The homeowners with a second mortgage are more likely to be struggling with negative equity.
New Plan to help avoid Mortgage Foreclosure or a Short Sale
Lenders and servicers of this group of homeowners will agree to charge 1 percent interest less on a Refinance Second Mortgage paying both interest and capital in the same monthly payment. This is necessary to decrease the monthly payments by hundreds of dollars each month. E.g. a homeowner paying $1,629.72 on a 6% fixed-rate $250,000 loan over 25 years were overjoyed to note that they now have to make mortgage payments of just $945.97 every month.
Interest-only mortgages
Homeowners willing to make interest-only payments can have their loan interest rate capped at 2 percent. Homeowners having sudden reduction in their incomes due to any reasons can now choose to make interest-only monthly payments until their fiscal situation improves. When a lender or servicer would agree to write-off a part of the debt of a primary mortgage, they can also make the same concession on a second mortgage. E.g. a homeowner paying $1,250 on a 6% fixed-rate $250,000 loan over 25 years were glad to welcome a monthly payment of $416.67 towards their existing mortgage.
Obama Incentives
President Obama’s second mortgage plan aims to bring in lenders and servicers for this homeowner relief through incentives of $500 for each qualifying loan. Other incentive payments include $250 annually to see that a borrower continues with their monthly mortgage payments instead of opting out for a short sale or foreclosure. In this way, it is possible that the Obama administration may share the cost to the lender coupled with the new lower monthly repayments in cases of Second Mortgage for bad credit for people faced with foreclosure or short sale.
The advent of the new plan means homeowners with second mortgages may be able to benefit by becoming eligible for both mortgage debt relief and low mortgage payments due to lower interest payments. Second mortgage homeowners facing mortgage foreclosure or a short sale can now receive government assistance to alleviate their financial binds, Loansstore also offers bad credit mortgage refinance services for bad or poor credit people.
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