Obama Mortgage Plan May Be Expanded

Posted by: Chris Palmeri on June 19, 2009

A front page USA Today article criticized the Obama Administration’s Making Home Affordable plan, which created incentives for lenders to reduce the interest rate on loans to troubled borrowers rather than foreclose on them. The paper reports that 190,000 loans were modified since the program began in March, while more than one million homes began the foreclosure process. USA Today says borrowers who try to participate in the program complain of long delays and misinformation from lenders.

Others just don’t meet the terms of the plan. Among those left out of the program, Robin and Craig Doyle of Woodlands Hills, California. Their $947,000 mortgage is too large to qualify for the program, USA Today reported. The limit is $729,000 in the most expensive markets.

Now Bloomberg is reporting that Washington may change the terms somewhat. Presently a first mortgage has to be no more than 105% of the market value of the home to qualify for a modification. Now the loans being modified may be as high 125% of the home’s value and still qualify for a lower interest rate.

Reader Comments

sheriearly

June 22, 2009 1:12 AM

This whole stimulus package is just part of the governments long term plan to take away the power of the people. Are we going to do something about it or be lazy and think someone else is going to do it for us? It is time for a revolution. We need to overthrow the government and take our power back. Before there is nothing we can do about it. you should check http://obamamortgage2009.blogspot.com/2009/03/obamas-mortgage-modification-do-you.html#comments

sheriearly

June 22, 2009 1:35 AM

Mr. President why are the banking,and loan company not making loans as you promised they would do for the american people we are all hurting and not getting any help. Time for them to answer to you for not helping us the little people that keep them in business, maybe we should boycott their business. Check http://obamamortgage2009.blogspot.com/2009/03/obamas-mortgage-modification-do-you.html#comments

MessengerBoy

June 23, 2009 11:13 AM

You say above that the 105% limit will be changed to perhaps 125% to qualify for a modification. Actually, this program affects refinancing, not modifications. The Making Home Affordable program has two components, one for refinancing options for those who are "underwater" in their mortgage -- this applies only to GSE loans. The second is the Home Affordable Modification program. There are no LTV limits per se to qualify for a HAMP modification.

martindendy

July 2, 2009 2:16 AM

I own a condo and have an outstanding balance of $140k, consisting of $104k primary and $36k secondary. I took the home equity to consolidate debts. At the time the property was valued at $163k but now it is valued at $134k. I'm looking to sell because i am engaged and will be moving into my fiancee's home. Check http://obamamortgage2009.blogspot.com/2009/03/obamas-mortgage-modification-do-you.html If I have a buyer who offers me within say $5-7k of the outstanding, can i agree to assume a loan on the residual and pay the bank the difference over time with interest? The same bank holds both mortgages.

pearlstarr

July 4, 2009 1:25 AM

If anyone has had any luck with any of these companies, could you please post it for the ones that cannot find one to work with you. We've almost lost once and just got a second chance that want last long so I need to get something done now, so if anyone knows the right number to call, i am sure a lot of people that hasn't found them would appreciate it but check out http://obamamortgage2009.blogspot.com or obamamortgage2009.blogspot.com

AJ

July 21, 2009 10:31 AM

Shakespere would love this irony...the Shylocks are running and taking the pound (or kilo) of flesh from every Antonio/Antonia. Where ist our knight in shining armor-Obama?

Let's not fool ourselves. A photo op does not maketh a rule/act/law. Banks only want to get bailout moneys-without any strings attached- but have no desire to adhere to any non-enforceble rules that the Obama administration naively came up with. Banks must be dealt with-matter of factly-and should they be going under----let them!!!!

Anyone on this board that is defending banks and their policies-you either are a banker or you represent the one percent that have too much. Please understand the plight of the majority or just shut-up. Using your comment as an analogy-I go to a doctor with complete faith that he/she will heal my ailment. I do not believe that to defend myself from medical malpractice that I have to know about biology/medicine. The law is on my side when a wrong limb is amputated or a surgical instrument is left inside me. So why is it that financial 'gurus' expect us consumers to know all the latin/sanskrit/martian terms that the banks have come up with in order to defend ourselves from 'financial malpractice'?

GIVE ME A BREAK!!!!

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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