22 Aug 10 Homeowner Assistance in the Obama Administration's Economic Stimulus Package

The current recession has had many unfortunate effects on the US economy, and one of the most devastating has been an upswing in homeowners who are losing their homes through no fault of their own, either because they have lost jobs or because their property has lost a tremendous amount of value, sometimes over 100%. In order to assist affected homeowners, President Obama has included a plan to help distressed homeowners to the Economic Stimulus Package. The Obama administration's assistance falls into three broad categories: credits on your taxes, grants, and loan modifications, the last of which I will discuss further below.

Since interest rates have fallen down into the 5% range (currently 5.16%), this is a good time to consider refinancing. The new loan modification program put into effect by the Obama administration is applicable to both Fannie May and Freddie Mac mortgages, which includes most US mortgages, and although the participation on the part of mortgage lenders is voluntary, they receive government incentives. Under the new plan, a loan modification is now easier to apply for, since you can apply even if you owe up to 105% of the value of your home. Both fixed and adjustable rate mortgages can be modified, so that your monthly payments are not more than 31% of your gross monthly salary. You also have an option to lengthen the term of a mortgage loan, thereby also reducing your payments.

You can search online by related keyword, such as "loan modification" or "homeowner stimulus" to find more in-depth information.