Obama Mortgage Rescue Plan 2011: Obama Housing Stimulus Package and Home Owner Rescue Plan

Have you taken advantage of President Obama’s housing stimulus package and homeowner rescue plan? Or do you still have questions about how it works and wonder if you should check it out for yourself to see if it will benefit you? There are qualifications that have to be met. For instance, you have to have a Freddie Mac or Fannie Mae government-backed loan (because the risk on these loans is already owned by the government), and about one-half of mortgages fall into this category. You can check with your bank, mortgage company, or loan modification service to see if your loan qualifies.

If yours is not a government-backed loan, but you are paying more than 31% of your gross monthly income, you may also qualify. One of the ideas of Obama Mortgage Rescue Plan 2011 is to also help people lock in the lower rates offered today even if they do not have the 20% equity that was previously required. However, the Treasury will not pay subsidies to lower rates below 2%.

The modification plan states that a servicer is to reduce the interest rate so that the homeowner’s monthly obligation does not surpass 38% of the borrower’s pre-tax income. The government then kicks in money to reduce the payments down to 31% of income. Also, as an incentive, lenders receive $1,000 for each modification and continue to receive $1,000 per year for the next three years as long as the borrower stays current on the loan. And the borrower gets up to $1,000 a year for five years as long as they stay up-to-date on their loan. This latter $1,000 per year goes to reduce the principal on the loan and thus the amount that is owed.

This program will not only keep you in your home, but will also include an additional $1,000.00 reduction in mortgage payments that may extend into the next five years. The Obama mortgage refinance plan also allows home owners to make mortgage payments that equal about 38% of their current income. For many Americans who have been struggling to make ends meet now can be put into a situation that can keep you secure. The result is that families don’t have to make choices about whether they will put food on the table or a roof over their heads.

The Treasury of the United States has an exact series of guidelines for mortgage lenders and banks to complete when refinancing or modifying a home mortgage loan. In the past for example, mortgage loans have been refinanced or modified by adding on missed payments to the loans principal which basically did nothing to reduce the monthly payment. The Obama Mortgage Rescue Plan 2011 announced by Obama will mean a great amount of savings for millions of homeowners.

Learn more about Obama Mortgage Relief Plan Qualifications.