You really want to know? Well, you better allow a few months for the market to “catch on” to the concept….
In essence, the Obama administration has published a plan which should apply to 75% of the mortgages in the country. The “Make Home Affordable” initiative is designed to assist the homeowner who is delinquent in payments, and cannot afford 100% of his normal payment, based on current household income.
In theory, the monthly mortgage payment is adjusted downward for 5 years. The hope is to save homeownership, a stable tax base, cash flow to the lender, and neighborhood values. There are many obvious advantages for all.
But most lenders don’t understand the details. In 5 recent foreclosures where I have represented the homeowner who is trying to keep his home, lenders didn’t know program specifics (nor did their attorneys). Their approach was the basic “we win, you lose; see you at the foreclosure sale”.
I have had to continue hearings while giving the lender personnel time to research what they are legally obliged to do: offer loan payment modifications for a 5 year term, if the homeowner does not have the money to make the contractual payment.
Stay tuned for further developments………