parag | Uncategorized | June 21st, 2010 | No Comments »
It’s now the first anniversary of Obama’s refinance plan that was launched in April 2009. Just one year ago, Obama launched his home mortgage refinance plan to protect homeowners from foreclosure. The plan was meant to help around 5 million borrowers by modifying loans to be less than 31% of gross income. On top of this, borrowers with a good credit history and those who haven’t missed a past mortgage payment would have the opportunity to refinance mortgage loans to less expensive loans. This was all to be done for an estimated cost of $75 billion plan.
The mortgage refinance plan hasn’t had the degree of success that was expected. Regrettably only a limited number of people have benefited from this plan, and it is questionable whether the new initiatives announced recently by the Treasury Department will fix the problem. The Obama refinance plan is definitely a work in progress.
One of the major issues has been the handling of paperwork by servicers who continue to request more documents and who are misplacing some that they receive. The Treasury Department is adjusting the processes so that that paperwork is required at the beginning of the process for a mortgage refinance. The goal of this was not to make acquiring home mortgage refinance easier but to get those that do get all their paperwork in to get through the process faster.
Many of the latest predictions say the plan will not help nearly as many people as it was initially intended to. The amount of foreclosures is still much higher than the numbers of those receiving refinance mortgage loans with modifications. Too many people can’t get the necessary documentation or simply have missed too many payments to qualify.
At year’s end, 800,000 people have received temporary home mortgage refinance adjustments while less than 70,000 people have received a permanent adjustment.
The large amount of paperwork required will make receiving a permanent mortgage refinance loan modification for a financially troubled individual quite difficult. However, this is also a necessary step for financial institutions to take, in order to make sure they provide the right mortgage modifications to their borrowers. Anyone considering taking advantage of the Obama’s administration’s plan to mortgage refinance should start by using some of the resources available on the internet. These resources will ensure that you learn about each type of mortgage and their special features. Moreover, you will know what you need to ask each lender you meet with to ensure that you make the right decisions.