Wednesday, April 15, 2009

Relief for homeowners and mortgage borrowers

The Obama's new mortgage plan is in progress and hope to be in effect soon. Six participants have signed up for President Obama's loan modification plan, which includes 3 of the nation's largest banks, reported by The Treasury Department.

1. JPMorgan Chase (JPM, Fortune 500), which will get up to $3.6 billion
2. Wells Fargo (WFC, Fortune 500), $2.9 billion
3. Citigroup (C, Fortune 500), $2 billion.
4. GMAC Mortgage, $633 million
5. Saxon Mortgage Services, $407 million
6. Select Portfolio Servicing, $376 million.

More loan servicers will join over time, said by a treasure spokesman.

The major loan servicers have already started modifying loans earlier this month under government initiative. This includes JPMorgan Chase and Wells Fargo. And Citigroup will start soon.

Homeowners and borrowers were desperately waiting for the program to launch since it was announced in the month of February this year. Under this modification plan, the servicers will reduce interest rates in such a way that the monthly installment should not go beyond 38% of pre-tax income of a borrower. It can be reduced to 31% by government. Loan amount can also be reduced to affordability levels by servicers. Government will share in the cost that the servicers will reduce.

"We view this modification program as yet another incremental opportunity for thousands of homeowners to preserve and maintain the dream of homeownership," Wells Fargo said in a statement.

It's great news for mortgage borrowers. It will help up to 9 millions borrowers’ to stay in their homes and own it completely. I really appreciate the plan and step taken by President Obama to help homeowners. I'm waiting for this modification plan to start in full flow.

1 comment:

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