When he was put into the office as president in 2008 the new president Barack Obama knew that the adjustable rate mortgage was causing the large numbers of foreclosures that were happening across North America.
He also knew that as the new leader he could not just sit by and watch thousands of hard working Americans lose their homes, he decided to do something about it and came up with the Obama Mortgage Stimulus Plan, or the mortgage bailout plan as the media often called it!
The main intent of the Obama mortgage plan was to help people refinance their homes even if the values dropped and also to help people modify existing loans much easier! This plan was signed into action in February 2009 and started to help home owners in March 2009.
While the results have been mixed the program has helped a fair amount of borrowers but there has been some confusion about what the program actually is. Below will give a brief overview to help you understand the Obama Mortgage Bailout plan.
Under the plan borrowers with either a Freddie Mac or Fannie Mae loan would be able to refinance up to 105% of the value of their homes. They however had to make enough money and have good enough credit to qualify for this program. For borrowers who did not have these types of loan or who had bad credit the Obama mortgage bailout would give financial incentives to lenders that modified borrowers loans.
While many people claim that the Obama plan did not help home owners there is plenty of evidence to support the opposite. the only drawback is that many home owners do not want the government involved in their home loans. If this is the case they can always work out a modification with their current lender.
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