Help is on the Way!

President Obama announced his new housing-rescue plan in early March. Help may be on the way for one in every nine homeowners. It will bring relief to low-income Americans trying to avoid foreclosure and to well-off borrowers who owe more than their homes are worth. Both are growing problems in the housing market. They are estimating the new plan will help as many as nine million mortgage holders. It has two main initiatives.

In the first phase, the government will offer financial incentives and subsidies to persuade mortgage-servicing companies to give borrowers who are in trouble a little breathing room. If a homeowner's current financial situation is so severe that they risk losing their homes, they may qualify for the program. Borrowers will have to prove they are in deep financial hardship and sign affidavits to that effect. In return, they may see their interest rates drop to as low as 2%. They may also have payment periods lengthened. This is all an effort to bring their monthly payments to 31% of their income -- commonly considered a reasonable ratio.

This program will be limited to first-lien mortgages with outstanding principal balances that are $729,750, or below for single-family homes. Loan-servicers will receive up to $3,500 from the government to participate. The government will also match a portion of the lenders' costs. Homeowners may get as much as $5,000 in federal money to reduce outstanding balances, as a way to encourage them to stay current under the new modifications. The program is tailored specifically for those who live in their homes and not for those who own investment properties.

The second part of the plan calls for Fannie Mae and Freddie Mac to refinance loans for millions of borrowers who may owe more than their homes are worth. There is no income ceiling for those who wish to participate. Their mortgages must be held or guaranteed by Fannie Mae or Freddie Mac, and they cannot owe more than 105% of the current value of their home. This should bring relief to those who have been impacted by the devaluation of their home. The Administration knows it could take time for relief to make it to troubled borrowers. "People need to be patient and understand that servicers are likely to get lots of telephone calls and lots of inquiries," a senior White House official said. It may not be immediate, but it is good to know that help is on the way!

To see if you qualify for either of the programs, see the government's new website at www.makinghomeaffordable.gov.

As the housing market continues to improve, the time could not be more right for those in the market to buy a new home. If you need help finding a house to call your own, contact Sandy's team at (225) 677-SOLD or email info@sandyco.com We are here it help you in East Baton Rouge, Livingston Parish, and Ascension Parish. Give Sandy and her team a call and then just hold on, help is on the way!!!