The
American economy has faced one of the worst period of its recession. The general
public has been affected so much that American government has to come in to
bail out most of the Americans from this critical situation. A time came when
almost every middle class house owner started fearing for losing their houses
at the hand of mortgage modification companies
and pledging agencies due to their inability to pay back the mortgage money on
their houses. That was the time when President Obama administration stepped in
and decided to give a second chance to such effected house owners. It was Obama home loan modification program .which put many people across United States at ease. The Government financial agencies started implementing about $75 billion loan modification program as Obama
loan modification plan. This program was primarily focused on house
owners refinancing those trucked in short payments of mortgage money. This way,
approximately about $700 billion were made spared for bankers for maintaining
their credit flow and about nine million house owner were benefited by Obama
hamp loan modification.
The Obama’s new plan that is
making home affordable, has given big incentives to encourage loan lender
agencies and other loan services providers to extend Loan-ModificationPrograms. Now they could do this either by lowering their interest rate or by dropping
the principal amount of the loan, but it was feared the bankers will not drop
the principal amount. However, they would lower interest rate for period of
five years and then return back to original interest rates that was 5%
presently.
The plan has two main
components, the home affordable refinance plans on one side offers the current
home owners the breathing space by allowing them to refinance their home into
much lower interest rate loans, it offers them to refinance to as much as 105%
of current value of their house. On the other hand portion of plan offers
relief to struggling home owner those cannot pay mortgage money and are in
danger of losing their home to foreclosure. The plan modifies their current
mortgage so that its monthly payment is reduced to 31% of monthly gross income
of house owner, this way every home owner gets bonus of $5000 annually on total
mortgage payments. In this connection every effected home owner must visit
government website; financialstability.gov.com
the US Government is determent to yet launch another bailing out program
“BAD BANK” that will buy all sick assets from banks in order to stabilize
financial housing market by spending approximately $2 trillion. The two
trillion dollars question is whether US Government will be able to curb
foreclosure of homes and get economy back on feet with Obama or Nobama.
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