New Obama Plan Slated to Help 9 Million Homeowners

The Obama administration’s housing plan is intended to help 9 million struggling homeowners avoid foreclosure, but it leaves out tens of thousands of borrowers in the most battered housing markets who won’t qualify because their homes have lost too much value.

The program detailed Wednesday offers refinanced mortgages or modified loans with lower monthly payments. Yet its refinancing plan is limited to borrowers who owe up to 5 percent more than their home’s current value. Loan modifications, supported by $75 billion in federal funding, are unlikely for severely “underwater” borrowers.

Borrowers are only allowed to have their loans modified once, and the program applies for loans made on Jan. 1, 2009, or earlier.

Consumers should contact their loan servicer — the company that sends out their monthly bill — to find out if their mortgages are held by Fannie or Freddie. The two mortgage finance companies own or guarantee almost 31 million home loans, more than half of all U.S home mortgages, and say they are lowering some fees to allow more borrowers to qualify.

“I’ve got good credit,” he said, “I’ve got money in the bank, but yet I’m being affected” by the mortgage crisis.

Seems more and more nowadays that loan modification is where the money is flowing.

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