Obama Mortgage Rescue Plan 2011: Understand Obama’s Rescue Plan and Avoid Losing Your Home

The Obama Refinance Plan was established back in March of 2009 and has done a lot to allow home owners to refinance. Prior to the plan, it was very difficult to go through the refinance process with a loan-to-value of anything above 95%. That has all changed as the new plan allows you to go through the mortgage application process with a loan-to-value of over 100%. With the great fall of the housing market, many homes are under water, meaning that the owner owes more than the house is worth.

The federal stimulus loan modification plan is called Making Home Affordable Modification. Funded by $75 billion in stimulus money, it aims to reach almost 5 million at-risk homeowners with an affordable mortgage payment. The program is voluntary, but the majority of lenders and servicers are participating-mainly due to the financial incentives offered for each qualified loan that is modified using the standard terms put in place by the Feds. A list of participating banks is available on the makinghomeaffordable.gov website.

Current mortgage rates are near historic lows which will give new home buyers and home owners a chance to save a lot of money if they can access the rates. Prior to March of 2009, it was very hard to access these rates as lenders were being very stingy. The recent memory of the subprime mortgage crisis has been etched in the brains of many of these lenders and they are not willing to go through the mortgage application process with anyone that many be any risk of defaulting; now that has all changed with the Obama refinance plan.

Homeowners need to take the time to learn about their options, educate themselves and be proactive in working with their lender. It is estimated that over 70% of all foreclosures could have been prevented if the homeowner simply contacted their lender.

Ask your mortgage lender to refinance your home loan at a lower interest rate. This will make your monthly repayments more affordable and reduce the amount you have to pay over the life of your home loan.

Learn more about Obama Mortgage Relief Plan Qualifications.