Positive reactions on the foreclosure prevention initiative from mortgage professionals, local realtors and builders were noted a day after US President Barack Obama unveiled his program.
Obama’s initiative, intended to streamline the number of foreclosed homes in the country, will allow lending institutions to reduce interest rates that would lower monthly mortgage payments to not more than 38 percent of the homeowners’ pretax income
Under the $75 billion plan, the federal government will match reductions that lenders will make to lower the mortgage payment to as much as 31 percent.
Despite the lack of details on how the Obama Administration will implement its loan modification program included in its foreclosure prevention plan, some homeowners who lost their jobs are hopeful that the initiative will bring the much needed respite that will allow them to continue paying their monthly loan payments.
Meanwhile, some mortgage professionals, local realtors and builders have expressed their support for the plan to end foreclosures.
Shore Mortgage President Robert Rahal said that the initiative is expected to help about 5 million homeowners whose mortgages are way beyond the fair market value of their properties but are making refinancing payments at reduced interest rates.
The initiative provides incentives to mortgage servicers to encourage them to offer loan refinancing to owners of distressed properties. Mortgage servicers will receive $1,000 for every eligible loan modification. In addition, the government will also provide mortgage servicers $1,000 annually for three consecutive years provided that homeowners remain current on their mortgage payments.
On the part of homeowners, they will also receive a balance reduction as much as $1,000 annually for five consecutive years provided that they pay their mortgages on time.
Independent Bank Corp. Senior Vice President Russ Daniel pointed out that the foreclosure abatement plan will encourage banks to offer loan modifications. He added that the initiative to help reduce the number of foreclosed homes will benefit almost 7 million Americans.
On the other hand, Coldwell Banker Schweitzer associate broker George Smale explained that any program that will help homeowners stay on their properties and avoid foreclosure would go a long way in helping stabilize housing prices.
The drastic decline in home prices has greatly affected banks and other financial institutions, making them less able to provide loans.
Author Resource:-
John Cutts has been educated in the finer points of the foreclosures market over 5 years. Read foreclosure listings articles at ForeclosureListingsNationwide.com - Your online source for foreclosure properties.
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