US Program Aims To Stem Foreclosures

US Program Aims To Stem Foreclosures

http://www.bizjournals.com/orlando/stories/2009/03/02/daily40.html

The US Department of Treasury’s Home Affordable Plan is expected to allow nine million borrowers to stay in their homes. The plan involves creation of a $75 billion loan modification program to allow responsible homeowners to refinance at lower interest rates. Low cost refinancing is expected to result in a significant reduction in the annual mortgage payments of thousands of families. The plan will help genuine homeowners and not just the speculators. As per the plan, lenders can modify their loans by reducing the mortgage to no more than 38% of the borrower’s income. The Treasury Department would share the cost for lenders to cut the debt-to-income ratio to 31 percent. Loans which have originated before January are eligible for this program while the homeowners whose unpaid principal balance is as much as $729,750 can participate in this program.