Homeowners facing foreclosure or struggling to make their monthly mortgage payments now have help as the Obama administration's foreclosure prevention program kicks in.
The multipronged fix will enable banks and loaning institutions to help as many 4 million struggling borrowers by modifying loans so monthly payments are no more than 31 percent of monthly gross income. Also, homeowners who haven't missed a payment can refinance into lower-cost loans even if they have little or no equity. This is expected to help up to 5 million homeowners.
To spur the loan modifications, the $75 billion loan plan will provide incentives to borrowers, loan servicers and investors. The government will also subsidize interest rate reductions to get borrowers to affordable monthly payments.
Source: CNNMoney.com, Obama Foreclosure Fix Open for Business
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