Mercury News...
In his State of the
Union Address, President Obama laid out a plan to help responsible borrowers
and support a housing market recovery. Details of that plan were released
yesterday. However, funding for the proposed program must be approved by
Congress, lowering the possibility that it will be implemented quickly.
Making sense of the
story
- Operated by the Federal
Housing Administration, the plan would allow underwater homeowners to
refinance into cheaper federally insured loans. Borrowers with good
credit who are current on their loan payments are eligible.
- The measure also streamlines
the process of refinancing an underwater mortgage, eliminating the need
for an appraisal or submitting a new tax return.
- To qualify, borrowers must be current on their
mortgage, have a minimum credit score of 580, and must be refinancing a
loan on a single-family owner-occupied principal residence.
- Lenders only need to confirm
that the borrower is employed. Loans that are more than 140 percent
of the home value probably would not qualify until banks wrote down part
of the balance.
- Congress must approve $5 billion to $10
billion in funding, leading housing experts to praise the plan’s
objectives with skepticism of it passing this year.
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