New initiatives designed to help mortgagers in need, and stimulate the troubled economy, have been much spoken about lately. Experts tend to find a number of weaknesses in Obama’s Homeowner Affordability and Stability Plan and doubt that these initiatives can really tackle the current crisis. They say it is too expensive, time-consuming, and have limited access due to certain provisions and stipulations.
One of the serious weaknesses of the new initiatives they point out is that only borrowers with loans held by the federally-controlled and subsidized Fannie Mae and Freddie Mac will be eligible to refinance. Borrowers whose loans are held by private investors are denied this right. The housing market at present looks divided to define the government-selected winners and losers areas.
olya Uncategorized, mortgage crisis, Fannie Mae, Freddie Mac, Homeowner Affordability and Stability Plan, housing market, Obama
President Barack Obama has come up with new improvements on the previous mortgage plan called to help people cope with mortgage costs in current crisis. “This bill removes those hurdles, getting folks into sustainable and affordable mortgages and, more importantly, keeping them in their homes.”
On May 20, 2009, the new mortgage bill was signed into law by President Barack Obama. The purpose of the act is to allow bankruptcy judges to modify mortgages on primary residences and encourage lenders to spare homeowners from foreclosure and take action on predatory lending practices. The law expands an existing $300 billion program that encourages lenders to adjust a mortgage if the homeowner agrees to pay an insurance premium. The program is set to expire in 2011.
olya Uncategorized, mortgage crisis, foreclosure, Helping Families Save Their Homes Act, modify mortgages
The Options ARM offers 4 payment options: Minimum Monthly Payment, Interest-Only Payment, Fully Amortizing 30-Year Payment and Fully Amortizing 15-Year Payment. It allows borrowers to make a low monthly minimum payment for 5 years and then the loan is recast which causes mortgage payment to increase.
Now billions of Option ARMs are due for recast in 2009 and 2010. What does it mean in the current situation of the subprime crisis? It means another, even more serious crisis may strike. The great fall in the US housing market is going to make the matters worse.
When the low rates on Option ARM products expire, homeowners will find themselves owing much more than their homes are worth. It is likely to trigger a big wave of foreclosures across the country. Experts believe payments may go from $1,000 a month to $1,800 a month.
olya Uncategorized, mortgage crisis, foreclosure, mortgage, options ARM
If you have put up with the thought that there will always be this huge gap between your dream home and what you can actually afford to buy, you shouldn’t have. A financial crisis is the key news at present but it also turns out that for some lucky ones it’s the key to having their dream come true. We witness the historic fall in housing prices, as well as lowest interest rates on fixed-rate mortgages. House hunters, now’s your chance!
Now that home prices have fallen dramatically, as much as 30% in some parts of the country, you can afford homes in better areas than you used to consider before. Mortgage rates are the lowest they’ve been in decades at present. The rates on 30-year fixed mortgage rate dropped below 5% and experts believe it is not the limit. This state of things have lead to a record refinancing activity as homeowners blessed with good credit and equity in their homes strive to lock in as soon as possible. Mortgages for home purchases have also increased and experts predict a huge rise in mortgage applications quite soon.
Simple comparison of home mortgage prices in different areas shows, that there appear a lot more options for potential home buyers than it used to be before crisis. Only a couple of examples: Riverside, California, a four-bedroom bungalow is for sale now for $179,900. It was sold for $259,425 in June, 2008. A duplex in Atlanta is now selling for only $50,000, while it was sold for $292,500 in 2006.
olya Uncategorized, mortgage credit, crisis, fixed-rate mortgage, house, mortgage, mortgage rates, refinance