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Obama’s Program Brings Hope to Florida Foreclosures

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By : John Cutts    99 or more times read
The U.S. Department of Treasury is preparing to commence implementation of President Barack Obama’s foreclosure prevention program.

The $75 billion anti-foreclosure plan is expected to help nearly 9 million distressed homeowners to modify their loans to avoid foreclosures.

The program would be especially beneficial to the almost 43,070 pre-filed Florida foreclosures. Florida foreclosures rate is among the top 10 highest in the United States, with 10,007 homeowners who have lost their homes to foreclosures in January 2009.

The foreclosure prevention plan calls for mortgage lenders to modify loans by lowering interest rates to help distressed homeowners remain in their properties.

In Florida, homeowners who want to avoid foreclosures and have loans guaranteed or owned by Federal Home Loan Mortgage Corp. and Federal National Mortgage Association are qualified to refinance through these government-sponsored enterprises.

A key feature of the program that would be a big help in reducing Florida foreclosures is the reduced monthly payments. Under the program, loans would be restructured in such a way that distressed homeowners would pay only 31 percent or less from their monthly income to mortgage lenders.

Additionally, total debt payments, including credit cards and car loans, would be not over 55 percent of the homeowner’s pre-tax income.

Here are some things to prepare by homeowners who want to avail of the program and avoid Florida foreclosures:

  • Credit report
  • Bank statements and tax records since 2007
  • Current income documents
  • List of recent expenses
  • Brief explanation of current financial condition

Meanwhile, another mortgage relief bill that would help stem the flood of Florida foreclosures gives authority to bankruptcy judges to require mortgage lenders to modify loans for struggling homeowners.

House legislators are expected to vote on the mortgage relief bill, which Democrats predict would be passed.

Under the pending mortgage relief bill, bankruptcy judges would use their power to determine whether a homeowner has received a reasonable deal from a bank to modify a loan. If bankruptcy judges think that homeowners will not receive a fair deal, they would step in by modifying the loans themselves.

Mortgage services have been lobbying against the bill designed to help struggling homeowners modify their loans to avoid foreclosures.

Nationwide foreclosures have seen a 25.7 percent drop in January 2009 to 72,694 from the previous month’s 97,841. However, the foreclosure rate decline is not substantial enough to warrant a sigh of relief from industry experts and legislators.

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