Should we be using the federal mortgage loan refinancing plan?

President Barack Obama was really glad to be elected in 2008. He may have been too excited when putting so much cash into so much of a stimulus. A mortgage refinancing program through the Government Housing Administration was one of the first programs called Make Home Affordable. The FHA works with an applicant’s loan lender, and tries to find a way to rearrange the loan to the benefit of all involved. This was a huge money advance the Treasury used for the plan. Some think the money went to waste. Article resource – Is the federal mortgage modification program worth it by Personal Money Store.

Uncle Sam and the way loan refinancing works

The Make Home Affordable plan only works one way. In this way, the person has to apply for a loan modification. A trial program is set up for the applicant if accepted to the program with the applicant’s lender. There is a specific reason for the trial. This is to see if obligations could be met by the person. The trial period has to be successful. If it isn’t, then there can be no permanent loan refinancing program. It sounds simple enough. Many wonder if the program should become permanent or of the modifications aren’t working.

Half in the program succeed

In the modifications, less than 50 percent make it. This comes from the Wall Street Journal . In August, an audit of the Home Affordable Modification Plan, or HAMP, revealed that only 434, 716 successful permanent modifications have gone through so far. There were 616,839 trial modifications that were canceled. This seems to be like money wasted. This is going to hurt the numbers. Everyone applying gets put in risk. The average ratio of debt to income for HAMP participants is 63.5 percent. FHA mortgages only go to those with a debt to income ratio of 41 percent or lower. This is where the bad credit comes for new homes the most.

Stimulus going

This program was intended to help keep individuals out of foreclosure. Given that about 40 percent of applicants end up back at square one anyway, it can be time that this plan was cut, and refinancing was left to the private market.

Additional reading

Wall Street Journal

online.wsj.com/article/SB10001424052748704075604575356663725805580.html”>Wall Street Journal

of applicants result in being able to do nothing and have no change. Maybe this means the private market should the take the plan as it is cut}.

Additional reading

Wall Street Journal

online.wsj.com/article/SB10001424052748704075604575356663725805580.html