Home Affordable Modification Program for New Homes
People were dreaming of owning their own houses and moving into them shortly. These houses were all purchased not by down payments but were through mortgage loans given by financial companies big and small. Real estate and property developers had accepted these mortgage loans of the buyers and houses were handed over them in good faith. When the recession hit the country without warning, financial companies without exception went into liquidation or sought rehabilitation loans from the government. Home owners were in a fix, about fulfilling for mortgage payments and had to default. The property developers were also in deep waters and in order to make a bad situation somewhat better they foreclosed all the mortgages (those who defaulted) and promptly evicted the defaulters from their new homes. The federal Government enacted a law for loan modification and home affordable modification program.
Many people who had been evicted and were virtually in the streets thought that the new legislation would enable them to get their houses back or suitable compensation for losing their homes. The legislation on the other hand effected some changes to reschedule the mortgage payments with a reduction in the amounts payable. The home affordable modification program guidelines have belied the expectation of all people and left everyone confused. There are several questions troubling the minds of the people which the guidelines are not able to answer. One particular condition is really unhelpful. The law states that mortgagee is solely responsible for making good any payment which he has defaulted in the year prior to enforcement of law. People are hoping with the restructuring and rescheduling their credit rating may improve. A complication which is not apparent in the federal loan modification program the installment may be higher than the earlier ones.
One token advantage the new legislation is that fluctuations in the interest rates will not affect their installment amounts. An interesting case is that of the Bank of America which sought financial rehabilitation from the government and got substantial help. Property developers who had their development and building work with financial loans from Bank of America stand to gain from this step. In acyclic manner this also helps the mortgagees who are associated with these builders. To that extent the Bank of America loan modification has been helpful to at least to small percentage of people. The new legislation lacks in clarity with regard to tax liability of the people.
The author of this article Peter White is a well known lawyer, he specializes in mortgage cases and his opinion on the legislation, Loan Modification Help, mortgage refinance and Second Mortgage Program programs are worth reading.
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