Obama’s Real Estate Rescue Plan

Obama’s Real Estate Rescue Plan -

Homeowner Affordability and Stability

Plan

Are you wondering how this new plan will affect short sales and the 9 million people in foreclosure that we’ve been thinking need our help and possibly a short sale?

Worry no more.  I’ve included the details but there will be few people who will get helped by this plan.  Obama says 3-4 million when there is 9 million borrowers to help.  I say maybe 1.5 million.

Short Sales are here to stay.

I’m sorry for the homeowners but as I’ve said before, the criteria from the government makes it pretty tough to qualify.

You can only be mortgaged 5% above the current market value of your house to get refinanced through this program.  That wipes out all of Florida.  Many of
them are 40-50% upside down.

Short Sale Coaching at its Finest!

Here’s the criteria as I got it from CNN.

Homeowner Affordability and Stability Plan

To refinance under the New Plan They must:

• Be current on their loans
• Have conforming loans
• Have loans Owned by Freddie or Fannie
• Owe <$417,000 on your current balance
• and have <105% LTV
• be able to prove their current income will cover the new house payment

Who is NOT eligible to refinance?

• >105% LTV

• Jumbo loan holders

Mortgage Modification

• Originated before 1/1/09
• Unpaid balance <$729,750 SF
• 55% Debt to income may still qualify and requested
  to accept debt counseling in a HUD program.
• Mortgage payments would be reduced to 31% of
  gross income (by reducing the interest rate, length
  of loan to 40 years, last resort to reduce the principal
• Payments stay the same for 5 yrs then the interest is to
  increase to market rate.-at no more than 1% per year.
• Have to modify all eligible mortgages unless
  prohibited by contract signed with investors who own the note.

Who is NOT eligible for a Mortgage Modification?

• Speculators
• Investors
• Property must be owner occupied,
  not vacate or condemned.
• Homeowners who were Irresponsible in
  borrowing, misrepresenting their income in a no-doc loan

The article said go to www.hud.gov for “self assessment” to determine if a person is eligible for the plan but I can’t find anything about it on the website

It might be up in a couple days.  If you find it, let me know.  But knowing this information will help you respond to your seller’s objections if they want the government to help them instead of a short sale.

Look at their income, expenses and the current market value of their house versus the amount they owe.  If they don’t fit the above categories, –

Short Sales It Is!

Short Sale Coaching at its Finest!

Deb McMillan
The Short Sale Queen and Coach