Who Will Qualify for Home Mortgage Adjustments
Posted 07/08/09
The rate of foreclosures on home mortgage loans continued to go up last month. Both home mortgage delinquencies and foreclosures are at the highest points the Mortgage Bankers Association has recorded since they began keeping track in 1972. The number of people who were unemployed went up to over 8 percent last month, as well. Home values continue to decrease in many areas of the country. Although the government recently unveiled a huge housing aid package, consumers appear to be reluctant to make any real estate purchases. President Obama has made it clear that he plans to help homeowners before they get in trouble and have to go into foreclosure.There is a lot of chatter about responsible consumers having to bear the burden for borrowers who took on a bigger mortgage than they should have. But the plan the new administration has put forward maintains that it will boost all consumers who own a home. If foreclosures in a certain area continue to go up, values for all homes there will go down. Communities will deteriorate, as more and more people lose their homes. Every tax dollar is helping all homeowners prevent their communities from falling apart.
To qualify for a home mortgage modification under the housing aid package, a homeowner must meet certain criteria. A home owner must own the property and occupy it as a primary residence. If a home mortgage was obtained before 2009, it can be considered. It must be demonstrated that the homeowner has been dealing with financial difficulty (for example, a lay off or reduction in pay) that has made it challenging for him to pay his mortgage bills. Finally, to be eligible for a home mortgage modification, a homeowner must demonstrate that his mortgage payments are over 31 percent of his income each month. The housing aid plan does not mean that no homeowner will go into foreclosure. If it is determined that a homeowner cannot meet the payments even if the home mortgage is adjusted, he will not be given the modification. History will be the judge of whether this new housing aid package will give the housing sector relief from home mortgage foreclosure and delinquency rates. Responsible homeowners who have and will continue to pay their bills on time will be aiding some irresponsible consumers, but many analysts fear that doing nothing would be more catastrophic for the already ailing housing market.