Obama stated that between seven and nine million homeowners can benefit from the program, through refinancing to low fixed rates, or by modifying their existing mortgages, however analysts believe the number of homeowners that could be helped may in fact be higher.
Three of the largest lenders in the United States, Wells Fargo, JP Morgan Chase, and Bank of America are on board with the new initiative, with multifarious other lenders following suit.
While the Making Home Affordable program can help homeowners to save their homes and prevent foreclosure, as well as lower their interest rates and payments, not everyone can qualify, hence it is important to establish other possible solutions to achieving an affordable mortgage payment and financial stability.
In years past, refinancing has been one of the most used solutions to lowering one's interest rate and mortgage payment. A refinance involves being qualified for a new loan to pay off the old loan. Benefits of refinancing ones mortgage include the ability to take cash out of the home for a variety of purposes, the ability to achieve a lower rate, and the ability to change the terms (duration) of the loan. Refinancing can result in more cash on hand for the borrower, lower payments, and a lower amount paid over the life of the loan.
Recently, many homeowners have taken on roommates or boarders in return for monthly rent to pay towards their mortgage. It is important to speak with State and Local Government prior to considering taking on a tenant as legally they may have rights that will make it difficult to evict them if they are not working out. If you consider having a renter, make sure that on a personal as well as financial level, things will run smoothly.
It is also important to note that many other loss mitigation services are available to those who do not qualify for the Making Home Affordable program. A loan modification may still be achieved through many different means, including a net cash-flow / hardship based approach, through legal pressure by finding significant violations of RESPA, TILA, or applicable State and Federal Laws and Statutes, or through the general guidelines published under FDIC's "Mod-in-a-Box". Additionally, a short-sale may be the best option for a homeowner that simply wants to leave the property free and clear, provided the lender is willing to allow the payoff of the mortgage to be "short" in return for being able to avoid foreclosure and the necessary legal and other applicable fees.
Ultimately, it is most important that homeowners seek advice regarding their current financial situation, and how a loan modification, refinance, or other solution may help them achieve financial stability and autonomy. A counselor can help you determine whether or not you qualify for a loan modification or refinance through the "Making Home Affordable" program, and possibly help you find other alternatives that may achieve the same results.
About the Author
A loan modification can help you save your house and stop foreclosure, lower your interest rate and payments, and possibly even lower the amount that you owe on your mortgage currently.
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