Massachusetts Foreclosures: Help From the White House
The Boston Condo Loft did a very nice job covering President Obama’s Foreclosure plan. For us, that means that Boston Foreclosures, and Massachusetts Foreclosures are likely to decline.
First, the basics of the plan. The Homeowner Affordability and Stability Plan will not go to speculators, and is intended for owner occupied homes. The Treasury will partner with lenders to reduce monthly payments, bringing down rates so that the monthly payment is no more that 38% of the borrowers monthly income. Then further reductions will be matched dollar for dollar with the lender, to bring the interest down to a 31% debt to income ratio. The modifications will be in effect for 5 years.
These apply to conforming loans only – jumbo loans, non-conforming loans don’t qualify. If your mortgage is not held or guaranteed by Freddie Mac or Fannie Mae, or if your loan is more than $417,000, you won’t qualify for relief. If foreclosure is imminent, further incentives are offered to lenders to consider alternatives, such as short sales. If the loan is not guaranteed by Fannie or Freddie, then the lender may rewrite the loan, but this is voluntary. While there are incentives for them to do this, it is not a guarantee.
You can read their entire post here.
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