Obama Outlines New Mortgage Relief for Borrowers
Barack Obama is continuing to trample on the free market system on Monday by announcing yet more government regulations targeting lenders and banks. Since people obviously can’t be held accountable for over extending themselves on their mortgages, the good ole government is coming to the rescue yet again. I find it discouraging that this trend continues since the Obama administration can’t continue to bail everyone out indefinitely.
1st TARP, and then HARP
The Home Affordable Refinance Programs rolled out new government refinancing options that became available to a large sector of borrowers. HARP is part of the Obama mortgage plan that helps Americans reduce their loan payments or alter their current mortgage to be able to stay in their home and avoid foreclosure.
In the latest move to bolster its $75 billion foreclosure-prevention plan, the Obama administration on Monday will outline new efforts designed to increase the number of borrowers who receive mortgage relief.
The Treasury Department on Monday will announce plans to appoint officials to monitor the actions of the largest mortgage servicing companies on a daily basis. It also will announce it is requiring mortgage companies to develop and report to the administration their plans to increase the number of completed modifications, a Treasury spokeswoman said.
The U.S. Treasury Department will step up public pressure on lenders to finish modifying more home loans to troubled borrowers under a $75 billion campaign against the record tide of foreclosures.
More than 650,994 loan revisions had been started through the Obama administration’s Home Affordable Modification Program as of last month, from about 487,081 as of September, according to the Treasury. None of the trial modifications through October had been converted to permanent repayment plans, the Treasury data showed. That failure is getting the administration’s attention.
The Mortgage Bankers Association, the industry’s largest trade group, predicts foreclosures won’t peak until after unemployment rates crest, some time in the second half of next year.
Cash Incentive
The administration’s initiative provides a cash incentive of $1,000 to the mortgage servicer once a loan is converted from a trial to a permanent modification plus annual payments of $1,000 for as long as three years provided the loan remains in good standing.
Eligible Loans
Eligible loans under the program are at least 60 days past due, in foreclosure or bankruptcy, and originated before 2009. The underlying property must be owner-occupied and conform to Fannie Mae and Freddie Mac loan limits, which can be as high as $729,750 in some areas. The data excludes Federal Housing Administration and Veterans Affairs loans. A borrower’s mortgage payment must be 31 percent or more of their gross monthly income to qualify.
