The Obama administration is always trying to think of new plans to help the mortgage industry. Will shrinking the home loans be an effective measure to take?
Now that the mortgage rates are beginning to increase, the federal government is looking for other ways to help troubled homeowners stay afloat and avoid foreclosure. One of the latest plans includes details that will help shrink the value of homes so fewer homeowners will be “underwater” in their mortgages and the ones who are still underwater will have a mortgage that is closer to the actual value of their home.
The Obama administration is setting aside $14 billion from the recent $75 billion foreclosure prevention program to help homeowners in this predicament. According to Trevor Hahn, the branch manager of Allied Home Mortgage Capital Corporation, the new plan will “help homeowners more than it will hurt homeowners.” He added that there are many homeowners in mortgage contracts who could benefit from having lower balances on their homes. The way the program is going to work is this: The government plans to pay mortgage lenders in exchange for lowering the balance of mortgages for homeowners who have been paying their bills on time. The lenders will also receive government money for reducing balances on home equity loans and second mortgages. The plan is also designed to give up to six months of financial relief to homeowners who are currently unemployed or negatively affected by the recent economic problems.
While this may sound like a great plan, critics of the administration’s loan modification program are not excited about it. Thomas Smith, president of Amerihome Mortgage Corporation, said their hearts are in the right places, but they have already messed up when it comes to the paperwork and other requirements. Supporters, on the other hand, thing the plan could help millions of Americans who want to realize the dream of owning their own home within their lifetime.
One story helps put this situation in perspective. Fred Peterson of Lynn, Massachusetts is underwater on his mortgage just like 15 million other American homeowners. He refinanced just three y ears ago and now owes more than $540,000 on a home that would only sell for about $350,000 these days. He says he just needs some “breathing room” so he can catch up on his payments. The administration’s new plan may just be that breathing room that Peterson and millions of others need in order to become current on their mortgage payments and pay off their home in a reasonable amount of time.
Do you think this new plan is worthwhile or is it set up for disaster? Let us know your thoughts below.
Conditions… Variable APR of Prime minus 1.01% in all states. Min loan amount $10,000. Max loan amount $200,000. 30-year term. Annual fee waived for the first year. See conditions for guarantee at thirdfederal.com.
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The Figure Home Equity Line is an open-end product where the full loan amount (minus the origination fee) will be 100% drawn at the time of origination. The initial amount funded at origination will be based on a fixed rate; however, this product contains an additional draw feature. As the borrower repays the balance on the line, the borrower may make additional draws during the draw period. If the borrower elects to make an additional draw, the interest rate for that draw will be set as of the date of the draw and will be based on an Index, which is the Prime Rate published in the Wall Street Journal for the calendar month preceding the date of the additional draw, plus a fixed margin. Accordingly, the fixed rate for any additional draw may be higher than the fixed rate for the initial draw.
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Please note that the interest rates offered are subject to change based on market conditions and borrower eligibility. The pricing and rate provided are accurate as of the specified date. It is important to be aware that the minimum loan amount for any loan program is $50,000. The specific amount and terms of the credit offer will be determined based on underwriting approval and guidelines, which include factors such as your credit history, your ability to make payments, and the available equity in your home.
To qualify for this offer, you must meet the required criteria and demonstrate creditworthiness. Additionally, providing up to two years of income verification may be necessary. The severity of your credit may also impact the required down payment. It is crucial to understand that the lender reserves the right to cancel this offer if the provided information cannot be verified.
Please note that all bankruptcies must be discharged in order to be eligible. This offer is nontransferable and is specifically available for single-family residences or owner-occupied condominiums. Please be aware that mobile homes and cooperatives are not included in this offer. It is important to note that the lender must hold a valid first lien position, and property hazard insurance is a requirement.
These are some key details to consider when evaluating this offer. It is essential to thoroughly review the terms and conditions and seek clarification from the lender regarding any specific questions or concerns you may have before proceeding with the application process.
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1. APRs for initial advances range from 8.25% to 18.00% based on funded HELOCs as of September 2024. Your actual rate will depend on many factors such as your credit history, loan-to-value ratio, line amount, loan term, lien position, and property state. The lowest rates are only available to the most qualified applicants. The APR is variable, but the APR that will apply to each draw will be fixed on the date the draw is made.
2. As of October 2024, 10% of funded HELOCs achieved a closing timeline of 6 days or less and a funding timeline of 10 days or less. This timeline assumes consumers close with our remote online notary, provide supporting documentation promptly, and ensure the information provided is accurate and consistent with our verification process. Delays, discrepancies, and other unforeseen factors may impact the closing timeline. MBA’s 2024 Home Lending Study reports an average industry closing time of 31 days.
3. A Home Equity Line of Credit has a variable rate. The APR may change, but the APR that will apply to each draw will be fixed on the date the draw is made. Your APR will be the Prime Rate at the time of draw plus a margin fixed for the life of the HELOC.
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Home Equity Loans & Refinance – Cash out
Customized rate quote with no impact to credit
Low Rates, Quick Approvals, Wide Range of Products
2024 Top 5 J.D. Power Ranking for Customer Satisfaction
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