Mark Etinger asked:




As the economy has steadily declined and jobs continue to be lost, more and more Americans find themselves in need of serious loan modification help. A large number of families are struggling to stay up-to-date on their mortgage payments, and as many as six million families are likely to face foreclosure in the next few years. Even the fortunate families who are able to shell out monthly payments on time have become victims of this economic crisis due to decreasing property values.

However, there are a number of options for homeowners who are struggling financially. The most common is employing the help of one of the highly successful loan modification companies who specialize in assisting homeowners in permanently changing the terms of their loan. This will result in lower monthly payments, reduced interest rates, and often a waiving of delinquent payments, making the mortgage more affordable for the payer. It is a highly recommended option that can often result in interest rates being unfathomably reduced and eventually caped.

There are also a series of government-issued plans that are intended to keep/put money in the pockets of the American homeowner.

One of those plans is the Homeowners Affordability and Stability Plan. Announced on February 19th of 2009, the Homeowners Affordability and Stability Plan is a $65 billion program intended to help approximately nine million U.S. homeowners who are making a good-faith effort to stay current on payments avid foreclosure. The plan was later supplemented by $200 billion in additional funding for Fannie Mae and Freddie Mac to more easily provide loan modification help.

The program will provide an opportunity for nearly five million responsible homeowners to refinance over time. Additionally, the Treasury Department will use a five-part strategy intended to prevent millions of foreclosures, and continue to buy a series of mortgage-backed securities to promote and support low mortgage rates.

Another government-issued plan recently enacted is HOME STAR, or more popularly known as Cash for Caulkers. The plan is intended to encourage economic growth by encouraging homeowners to make energy-efficient improvements to their homes by offering rebates.

While the Cash for Caulkers plan would likely reduce air pollution and greenhouse gases, it is undeniably mostly intended to stimulate American business by increasing spending on materials and installation. It is also hoped that making environmentally-friendly additions to a home would also significantly reduce power bills over the long haul.

However, the Cash for Caulkers plan does not seem ideal for a family already struggling to make payments on their mortgage. After all, if you are already struggling with your month-to-month bill payments and are badly in need of home load modification, spending more money to renovate the energy efficiency of your home seems counterproductive, regardless of what rebates are being offered.

While the government is taking steps to help stimulate the economy, as well as prevent Americans from losing their homes, it would appear that one of the best options is seeking professional home loan modification help, therefore decreasing monthly payments while simultaneously keeping your roof over your head.

Gordon

Mary Ny asked:




Fannie Mae was chartered in 1938, as the Federal National Mortgage Association (FNMA), with the responsibility of creating a secondary market for home mortgages. It operated under direct federal control. In 1968, the Federal National Mortgage Association was partitioned into two separate entities- one wholly owned by the government and known as the Government National Mortgage Association (Ginnie Mae), and the other to retain the Federal National Mortgage Association (Fannie Mae) name. It was privatized by legislation enacted in 1968 and became fully private in 1970.

Fannie Mae (along with Freddie Mac) sets the limit each year on the size of a conforming loan based on the October to October changes in mean home price. Mortgages above this limit are considered jumbo and super jumbo loans because Fannie Mae and Freddie Mac only buy conforming loans to repackage into the secondary market, making the demand for non-conforming loans much less. Thus, interest rates for jumbo and super jumbo loans are higher than for conforming loans.

According to the Office of Management and Budget (OMB), borrowers see mortgage rates 25-50 basis points lower because of what Fannie Mae and Freddie Mac do. This is reflected in lowered interest rates of up to a half percentage on each individual homebuyer’s mortgage, which translates to lower payments and increased consumer cash flow for other purposes. Fannie Mae and Freddie Mac also were the agencies that recommended that FICO scores be used in mortgage lending. Now, FICO scores are the mortgage industry standard for originating conventional loans, adjustable rate mortgages (ARMs) based on various prime rate indices, jumbo loans and 2nd home purchases as well as the popular cash out mortgage refinance loans.

Today, Fair Isaac estimates that more than 75% of all mortgage originations in the U.S. involve the FICO credit score. FICO scores are being used in almost every sector of the nation’s economy, and largely determine whether or not you will be approved for credit (including mortgage loans), what interest rates you will pay and what loan terms are available to you. This is why it is important to maintain a high FICO. But, if you’re a homeowner who’s had credit issues in the past, a timely mortgage refinance or home equity loan (second mortgage) for debt consolidation can help raise your score substantially and save you a lot of money.

Pauline