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Can Obama's New Home Loan Refinance Program Help You Avoid Foreclosure?

06/21/2010

Obama has come up with a home refinance stimulus package and loan modification program to help U.S homeowners avoid home foreclosures. Designed specifically for all the borrowers who are facing financial hardships, these homeowners are not in a condition to repay the loan. The program would cover almost 9 million mortgages and the government would spend $75 billion.

There are 2 major areas of the new stimulus package:
1. Home Loan Refinance
2. Loan Modification

1. Home Refinance Stimulus Package
Fannie and Freddie would refinance the mortgages of homeowners who are unable to pay their monthly mortgage balance. The only pre-requisite for this package is that the mortgage must be a guaranteed by Fannie Mae and Freddie Mac, and then even if you are strong enough to pay the entire extra amount; you can gain advantage of the program.

The largest stipulation of this program is that the property must be a residence. That is offices and commercial buildings will not qualify. A refinance can help bring about the lowest mortgage rates.

2. Loan Modification Stimulus Package
Obama is going to provide to all lenders doing loan modification on existing home loans of with incentives for doing so. The main perk of this program would be the drastic drop of interest rates ,tenure of the loan would be increased to reduce monthly payment amount and borrowers will get waiver of late fees.

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