Friday, February 20, 2009
President Obama and his Financial Ideas on Reverse Mortgage:
The year 2009 came up with much awaited and anticipated plan of President Barrack Obama on Reverse Mortgage, to fight the housing crisis. President can sense that a total amount of $300 billion is required to give protection from severe onset trouble of foreclosure. A bill got introduced in the House of Representatives to raise the Home Equity Conversion Mortgage (HECM) limit in the current year from $417,000 to $625,500 as reported by the National Reverse Mortgage Lenders Association (NRMLA). I think this would definitely give access to millions of people to take part in the program of reverse mortgage in this current crisis market. This will also give great relief to consumers who are already in process of court date with an added anxiety that the lenders might not allow him to stay in his house at all. Many financial strategies are there which if worked out with proper planning can give desired outcome. So, to know further check out what President Plan speaks
i) Lenders have to agree to cut interest rate so that monthly payments of borrowers are not more than 38% of their total income. This again would be checked to bring down to 31%.
ii) Borrowers having 55% and more debt obligations of their total income has to enter a consumer debt counseling regarding their car, credit card and other debt to get mortgage modification facilities.
iii) This program targets mainly those borrowers who are occupied with high mortgage debt in comparison with their income. However they do not have to miss payments for that to get qualified.
iv) Any kind of modification of plans will not be encouraged for coming 5 years.
The president plan is certainly going to help many homeowners to keep foreclosure away from them. The challenge is for the senior homeowners with mortgages. Well its time to see how flexible the plan is going to be for people. However the forthcoming standards might have something like these items in stock which are yet to be published.