Home Stimulus Package

Home Stimulus Package Helps Homeowners Avoid Foreclosure

President Obama’s new stimulus package brings much-needed help for homeowners struggling with their mortgage.
$75 billion dollars has been earmarked to save homeowners in financial distress.  According to this plan, even the lenders receive an incentive of $1000 per completed loan modification.

Following are some tips to help you take advantage of this stimulus plan to avoid foreclosure and save your home.

•The loan modification must have mortgage payments that are no more than 31% of your gross income.   This includes taxes, insurance and any homeowner dues.

•In addition, the total monthly payments on all your indebtedness cannot be more than 55% of your monthly gross income.

•Under normal refinancing guidelines, only those with 20% equity in their home could refinance.  Under the new stimulus plan, if you owe more than 105% of the current market value of your house, you are eligible for refinance.  It does not matter how much equity you have in the property.   This opens up assistance to at least 14 million homeowners.

•There are governmental consultants who can help you with eligibility information.  The United States Department of Housing and Urban Development, HUD, can also represent you with your lender and help you get the loan modification you need.

•There are also non-profit organizations that support homeowners:  Neighbor Works America, Acorn Catholic Charities, the Neighborhood corporation of America and the Urban League are a few.

• The stimulus package does not assist homeowners whose loans are not backed by Fannie Mae or Freddie Mac.  Your lender can apprise you of your particular loan details.

•Homeowners who have amassed debt larger than the limit of $417,000.

If you are experiencing financial hardship, the new stimulus package put forth by President Obama may help you avoid foreclosure and save your home.  But do not delay; the stimulus package is only available for a limited time.  Contact either your lender or a representative from HUD or a public service organization to see if you meet eligibility requirements.  Carefully complete the desired paperwork and also submit the required documentation.  You can not only do just one loan modification, but you can only do one application!  So, take great pains to do your homework and correctly complete your application package.