Taking Advantage of the Obama Plan to Help Homeowners

In April 2009, Obama launched his plan to protect homeowners from foreclosure. The plan was meant to help around 5 million borrowers by modifying loans to be less than 31% of gross income. Additionally, borrowers with a good credit history and those who haven't missed a past mortgage payment would have the opportunity to refinance to less expensive loans. This was all based on a $75 billion plan.

The plan hasn't had the turnout that was expected. Unfortunately, only a small number of people have benefited from this plan, and it is questionable whether the new initiatives announced recently by the Treasury Department will fix the problem.

The forefront of the problem has been the handling of paperwork by servicers who continue to request more documents and who are misplacing some as well. The Treasury Department is adjusting the processes so that that paperwork is required at the beginning of the process. The goal of this was not to make acquiring modification easier but to get those that do get all their paperwork in to get through the process faster.

Many of the latest predictions still hold that the plan will not help nearly as many people as it was initially intended to. The amount of foreclosures is still much higher than how many people are receiving modifications or refinancing. Too many people can't get the necessary documentation or simply have missed too many payments to qualify.

At year's end, 800,000 people have received temporary adjustments while less than 70,000 people have received a permanent adjustment.

The large amount of paperwork required will make receiving a permanent loan modification for a financially troubled individual quite difficult. However, this is also a necessary step for financial institutions to take, in order to make sure they provide the right mortgage modifications to their borrowers. Anyone considering taking advantage of the Obama administration's plan to refinance their home mortgage should start by using our resources here at Refinance.com. Our resources will ensure that you learn about each type of mortgage and their special features. Moreover, you will know what you need to ask each lender to ensure that you make the right decisions.