In an attempt to stabilize home values and to get our financial system moving onward toward positive growth the administration has pumped trillions of us dollars into the financial system through various packages. Some of these programs were intended to spur job creation as well as get credit flowing to the consumer and to keep borrowing expenses low for an extended period of time.
California house owners who are still feeling the economic strain from the downturn are having difficulty paying their mortgage, in most cases, and are looking for assistance. The trouble with many house owners is their credit has taken a hit, their mortgage is under water, they are delinquent on their mortgage, or they basically don’t have the equity in their residence to refinance, so a home loan mortgage modification is their only option.
Getting a lower monthly payment, for many home owners, would go a long way in getting them back on a more secure financial foundation. Home owners can benefit from a home loan modification because the monthly mortgage cost for anyone in the home loan modification program is going to be dependent upon their annual income.
Usually, in the home loan mortgage modification program, a home owner is going to lower their monthly mortgage expense to around 30% of their annual income. This would help many home owners on the brink of defaulting or foreclosure, but there is a long procedure to undertake before receiving a home loan modification.
They will have to fill out paperwork and go through a trial modification, that is supposed to last about three months but a few have been extended, and there are testimonies of troubles in the modification process when dealing with lenders.
Despite the fact that trouble and frustrations could happen, if you are in need of a home loan modification, talk to you lender and begin the process if you can and if it’s appropriate for you. Even if you hit speed bumps along the way, don’t get bogged down in the process and remember that a modification may well be the thing to save your home and get you back on your feet.
One such program that has been keeping mortgage interest rates artificially low for some time now is the FED’s mortgage back security (MBS) purchase program. The FED has committed to investing in $1.25 Trillion in mortgage back securities through March 31, 2010. The Federal Open Market Committee (FOMC) has continued to reiterate their intent to terminate this program at the end of March which is expected to have a negative consequence on the direction of mortgage interest rates in the near future. We anticipate mortgage interest rates to rise as much as 0.5% to 0.75% by the summer of 2010. Many real estate and mortgage professionals are saying at this time is the time to buy or refinance that home. With home values down as much as 50% in some areas, and with mortgage rates as historic lows, and homebuyer tax credits available for both first time and move up buyers, at this point is a great time to consider buying that home.
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