Home Affordable Refinance Program: A Case Study

These charges are now either included in the closing costs or added as premiums on the interest rate. HARP is only available for performing Fannie and Freddie loans, but that covers a huge portion of the U.S. mortgage market.

In an effort to assist homeowners facing foreclosure, Countrywide created Countrywide Comprehensive Home Preservation, which enabled consumers’ with the opportunity to refinance or modify adjustable rate loans for a lower interest rate or a fixed rate (Ferrell, et al, 2013). Although, the program was created in an honest effort to help, the damage had already occurred. Unfortunately, the program was too late as the government was now questioning the lending practices at Countrywide (Ferrell, et al,

The foreclosure crisis is the result of too many unqualified people getting loans, the result being more money was lent out than what is going to be paid back. This was due to the lifting of restrictions on the mortgage industry to further social engineering. We need to return to sound lending practices as we had in the past (and as practiced in Canada). One of the greatest factors that contributed to the housing crisis was stated-income-loans. A “stated income loan” is a loan given out to a person of an income that is not documented but verbally claimed. This loaning system is poorly contrived, and should be the first thing to be removed. However, the damage of this system has already been done. Much of this reform is already

As the foreclosure crisis in the United States continues to spiral, increasing attention is being given to novel and creative solutions for reducing the risk of mortgage default. The Obama administration has proposed several government-backed programs to help homeowners stay in their homes, and private lenders have tried various approaches to stabilize the economic situation. To date, none of the enacted efforts has substantially improved the crisis, and as such the number of homeowners filing for bankruptcy and entering foreclosure continues to mount.

The homeowner must sign a new mortgage agreement that will outline all the parameters relating to maintaining the mortgage with the department of HUD. The term of the initial contract is 24 months. At anytime during the contract period, if the owner’s financial status changes, HUD must be notified immediately. Every 24 months, HUD will re-assess the homeowner’s financial status and determine if the contract is to be renewed or dismissed from the program. If the contract is reinstated it is imperative to note that this can only be done three times, which equates to a total of 72 months. If however, it is determined that the homeowner can be removed from the program, HUD will provide a lender that will ensure that your mortgage rate and payments are affordable based on Federal Housing Administration program. Once exited from the program, if the homeowner experiences additional financial crisis, they may be allowed to re-enter the program up to a maximum of three times as long as they have not been in the program more than 72

Foreclosure in America has been a rising and prominent problem recently, and has destroyed many Americans hopes and dreams. Over 2.3 million homes were foreclosed in 2008, and an estimated four million homes will be foreclosed by the end of this year. Despite the efforts of many banks and lending companies, over half of homes will foreclose that have received their help. I believe that we have only started in the right direction in solving the foreclosure crisis. Giving money and lowering mortgage rates will help, but I believe we should find out why Americans are in this situation in the first place. We are being too stereotypical when we think the only reason someone is foreclosing is because of irresponsible payments or buying a home

FHA loan refinancing offers an excellent system for property owners to lower their monthly home loan repayments substantially. The information and guidelines mentioned previously can help anyone who wants to refinance a mortgage loan using the FHA refinancing options. That being said, it is appropriate to contact Texas FHA lenders to learn

Mortgage rates have been at an all time low for many years and while they've gone up a bit recently, they are still historically low. This has led to masses of homeowners scrambling to refinance their mortgages. The reason so many homeowners have waited to refinance their mortgage is because there are so many mortgage refinancing myths out there. That's why we're going to help you wade through the information and dispel those mortgage refinancing myths, which will help you make an educated decision about whether or not refinancing your home is the right decision for you and your situation. Here are the top nine mortgage refinancing myths that keep so many homeowners from taking advantage of these historically low interest rates.

Too many Americans have fallen victim to the crisis that has become the norm for our citizens these days. Lenders no longer want to work with individuals who have gone through the foreclosure process and for many it is not only their homes they lose. Some have lost their jobs and/or families, others fall into a deep depression and worst of all some have taken their own lives.

The foreclosure crisis has hit America exceptionally hard these past few years especially in California where the housing market is at its worst. California is also the worst because it is home to a lot of the most expensive properties. People are walking away from their homes because they cannot afford the mortgages or loans that they took out on their homes. The lenders are also to blame for this because they did not thoroughly look at them borrower’s credit and income to ensure that they would be able to pay it back. In some cases they would lend money even if the borrower had terrible credit. This has caused corporations like, Country Wide Home Loans, to be bought by other companies. A rather simple solution to this would be to

Since this paper only touches upon the basics of this plan, it will only explain three priority groups (keeping in mind that various subgroups can be created for a broader variety of situations). The highest priority group (Group A) must meet the requirements that follow. Homes must have been bought before January 1st, 2009, and the loans must have been financed by Fannie Mae or Freddie Mac. Borrowers must be current on their payments, and must not have missed a payment for one year before requesting the refinance. The group with the second highest priority (Group B) could have purchased their home either before or after January 1st, 2009. However, if the loan was taken out after the date, residents must wait one year (with no missed payments) to apply. Those who qualify for Group B must not have any delinquencies yet, but they can have missed two payments at the most. Therefore, while they do not have to be current on their payments, if they exceed missing two payments, resulting in a delinquency, they must be eligible for Group C. This lower priority group must have a delinquency, before or after the bank starts the process of foreclosure. This group would need to be behind on their payments, missing at least three. While all of these groups are eligible for a refinance, Group A will be able to refinance for the greatest volume of customers at the highest loan

A second thing that could be done in order to reduce foreclosures is to create a system that is similar to “rent to own” (http://home.howstuffworks.com/real-estate/rent-to-own-homes.htm). In this scenario if a homeowner cannot pay a mortgage, he or she has the option to freeze their mortgage and pay a lower “rent” rate in which all rent payments become profit for the bank and not applied directly to the mortgage.

Solutions to alleviate the impacts of the foreclosure crisis are absolutely central to the health of our financial systems and the country’s economic stability. The foreclosure crisis is nowhere near an end as mortgages with “teaser rates” are expected to default in catastrophic numbers. The goal of foreclosure solutions must be to keep people in their homes with affordable monthly payments, while still leaving cash in their pockets to contribute to our heavily relied upon consumer based economy. Solutions do not lie in forgiving mortgage loans and billion dollar bank handouts, as this only sets a bad precedent for contract law and regulation standards by condoning financially reckless behavior. We must work with people directly and mortgage modifications must be dealt with on an individual basis.

Banks now offer programs to help homeowners/homebuyers, but many times, these loans are often hard to obtain. The current programs have more stringent requirements that are unreasonable for distressed homeowners. In my opinion, the only way to rectify the foreclosure issue is to make a substantial change in how potential homebuyers and homeowners obtain loans.

Another New York Times tells that financial institutions that are dependent on mortgages, like Fannie Mae and Freddie Mac, have not been able to pay back the money they owe to the federal government.2 They are still asking for more money because of the continuing real estate crisis. Instead of simply giving these mortgage giants money to stay afloat, the federal government would be more effective if it were to support them by putting the money directly towards the root of the problem.