Homeowner Affordability and Stability Plan and Short Sales

Recently, President Obama signed a plan designed to help the homeowners to stay in their homes and avoid foreclosure. The three main points of the plan are as follows:

1. It will help homeowners refinance their homes to lower interest rates. The “Loan to Value” on the loan should be no more that 105%. So let’s assume the house was bought for $500,000 with the first Trust Deed of $400,000 and the second Trust Deed of $100,000. If the value of the home dropped to $420,000, the homeowner still can refinance as it is 105% from the first Trust Deed. If the Value dropped below $420,000, the homeowner will not be eligible to refinance. This section of the plan will receive $75 billion to help seven to nine million homeowners to refinance.

2. The plan will help homeowners modify their loans. All the loans which were bought by FNMA and FDMAC can be modified (60% of all the loans in today’s market fall under this category).This section of the plan is designed to help approximately four to five million homeowners. The bank will modify the loan where the new PITI (Principle+Interest+Taxes+Insurance) will be 38% and they the bank and FNMA will split the additional 7% of the costs and bring the PITI to 31%. If the loan is not held by any of the mentioned above investors, the homeowner should contact the bank directly and try to work out some options. Homeowners should be aware of the many scammers working in the loan modification field. Make sure you hire someone with a license and do not pay any up front fees for these services. At the end, you can do the modification yourself.

3. This part of the plan is designed to make some money (over $200 billion) available for people who are buying a home for the first time (first time home buyers) by providing new mortgages with very affordable and low interest rates, including tax credits that will be available to them at the end of the year: $8,000 tax credit if new homeowners buy in 2009 and up to $18,000 if they buy from a developer.

The homeowners unable to qualify for the programs mentioned above will still be able and encouraged by the banks to do a Short Sale or a Short Pay Off to avoid foreclosure.

This is just short break down of the plan. If you have any questions or need to see if you qualify for any of the three programs discussed, or to learn more about Short Sale programs, you are more than welcome to contact me at ihorpochay@tarbell.com

Ihor Pochay
REALTOR / SHORT SALE & REO SPECIALIST
Tarbell, Realtors
Cell: (562)334-7393
Off: (909)629-6186 Ext. 339
Fax: (909)629-6710
ihorpochay@tarbell.com
www.MyRealtorIhor.com
www.shortsaleyourhome.blogspot.com