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Sacramento homeowners who have sub prime mortgages and are up to speed on their house payment may be given a life saver that the Bush administration is working on.
Real Estate has taken a hit with all the sub prime mortgage loans given out with teaser interest rates.
A home owner, that (means you live at the property this is not for investors) just received a life line while out drowning in the sub prime mortgage catastrophe.
It is important the homeowner has NOT missed any payments. This life line will keep the mortgage interest rate at the teaser rate and it will NOT adjust. This reprieve is for 5 years. With over 900,000 foreclosures nationwide, this comes as good news for those homeowners whose loan was ready to adjust. In order to qualify, here are the stipulations:
- Have an sub-prime adjustable loan
- Loan issued 2005 through July 30, 2007
- Reset would have taken place between Jan 1, 2008 and July 31, 2010
- Live in the house
- Be current with mortgage payment
- Reset of more than 10%
- Credit score of less than 660 and not have risen more than 10% since original loan was given
If this seems confusing, be sure to call the hot line at 1“888“995“HOPE.
FHA may be able to help refinance those with good credit history according to the government. However, one thing it seems they missed in all this is that a homeowner cannot refinance if the house is valued for less than what they owe so Im not sure what they are smoking!
For those who are in foreclosure or have been foreclosed on, its too late for this. Also, homeowners who have missed any payments, this is not for you either.
Laws are being written so that sub-prime loans are not given so freely as they were especially to those who are not qualified for that loan program.
Much talk and opinion has been expressed about bailing out the sub-prime homeowner, some feel that government should not interfere and let the homeowner lose their home.
It would appear that the Feds think that real estate values will be on the rise and those homeowners who qualify for this 5 year reprieve will be able to refinance their homes to a fixed rate. Perhaps, a new loan program will become available within 5 years or speculators may be right that this will simply put off the inevitable and within 5 years there will be a slew of foreclosures.
If I were in a position of having a sub-prime loan and be given this 5 year life saver, I would be diligent in making my payments on time and be looking for alternative loan programs throughout the next 5 years. It is essential to hook-up with a reputable Lender during this time so that you have someone looking for the best possible loan program for you before the 5 year time limit.
Industry observers predict this proposal will spur a wave of lawsuits from the investors who bought mortgage-backed securities expecting the rates to reset and their interest payments to rise. This should be interesting to watch.
CNBC, reported that officials representing major players in the mortgage industry believe the plan would withstand any legal challenges and would help at-risk homeowners avoid defaulting on their mortgages.
This is the best holiday gift these home owners could have received breathe a sigh of relief but remember to be diligent in payment your house payment and seek new loan programs.
Happy Holidays!
Do you have an opinion about saving these homeowners from their sub prime mortgages?
Good read! Happy Holidays to you as well.
I hope that all will be able to enjoy the holidays…you too, thanks