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Obama Pushes New Mortgage Payment Relief Plan

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In the wake of the recent settlement between some of the nation’s top home loan lenders and both federal and state governments, President Barack Obama recently announced more plans to help consumers with troubled mortgages.

President Obama unveiled a new plan to cut fees associated with refinancing any government-backed mortgage. In doing so, he highlighted that the discounts associated with the new plan would save the typical American family whose mortgage refinance was obtained before June 1, 2009, about $1,000 per year. The change could affect somewhere between 2 million and 3 million Americans who received refinances through the Federal Housing Authority.

“While the government cannot fix the housing market on its own, the president believes that responsible homeowners should not have to sit and wait for the market to hit bottom to get relief when there are measures at hand that can make a meaningful difference,” the White House said in announcing the plan, according to a report from the Christian Science Monitor.

The change comes as a response to fee increases by the FHA over the last few years that were intended to offset losses related to defaulted mortgages, the report said. It is intended to make the refinancing process easier for lenders and borrowers alike. Consumers who refinance will now have to pay an upfront mortgage premium of 0.1 percent of their loan’s total value, the lowest allowable rate, as well as an annual fee equal to 0.55 percent. In addition, they will face lower ongoing fees on their mortgages backed by the FHA as long as they make a 3.5 percent down payment on the purchase of a home.

This change in FHA policy is just the latest attempt by the Obama administration to make it easier for troubled homeowners to cut the cost of their monthly mortgage payments, though many of the other attempts have drawn some fire for the difficulty that many homeowners across the country had in qualifying for them. Often, even the most financially troubled families, many whose home values had slipped below the amount they still owed on their mortgages, had trouble meeting the stringent requirements mandated by the federal government, and these programs typically ended up helping far fewer homeowners than they originally intended.

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  • Carolyn Ewing

    We have a conventional loan, not FHA, what help can we get? We can’t get help from our mortgage company because we are not in default on our mortgage. We are now just paying interest only, we need it modified or a refi to include P&I. We have excellent credit, but our only income is social security and we own more on our mortgage than our house is now worth. What can we do????

    • Ryan

      Carolyn, you are in exactly the same spot as me! I would like to know the same question. The originally proposed mortgage relief plan that I remember would of allowed people like you and I to refinance and get our mortgages reduced. I have my mortgage through Bank of (thieves) America. What the hell happened to that is my question? I’m assuming it got shot down and got backburnered.

  • Margie

    I have a first and a second the second is interest only i tried to refinance but do not have enough value. Both loans are in good standing I would just like to reduce my interest rate on both and include principal and interest on the second.

  • michelle

    we went into a lower payment plan do to loss of job with wells fargo and now that our 6 mths is up since i got a job they now said i have to pay back what we did pay before? is this right?

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