Thanks to President Obama’s ambitious plan to improve the housing market, being on the list of foreclosures in Santa Cruz doesn’t necessarily mean that foreclosure is inevitable. You have options, and the President’s loan modification program makes keeping your home even more possible.
Overview of the Plan
The President’s plan to reduce foreclosures in Santa Cruz is based on the thought that struggling homeowners wouldn’t sell their houses if they could only make the monthly payments. Due to this belief, participating lenders are required to reduce monthly payments for homeowners who qualify until they’re no more than 38% of the homeowner’s monthly gross income. After that, the government lends a helping hand. Between the lender and the government, the mortgage payments would be dropped to no more than 31% through various means (extension of the loan, reduced interest rate, etc).
Even with the 31% threshold, many are afraid that’s not enough incentive for homeowners to keep up payments on a depreciating home. They speculate that homeowners may default on the loan anyway. To cover this possibility, the administration is offering cash incentives to lenders and struggling homeowners.
Each lender that participates will receive $1,000 per loan modification. Those lenders will also get an annual $1,000 for up to three years as long as the homeowner keeps their payments up. For homeowners facing foreclosures in Santa Cruz, the good news is that borrowers can get their principal lowered by $1,000 per year for up to five years. Again, however, it depends on whether they keep their payments up.
You May Qualify
This is fantastic news for many. If you’re facing foreclosure due to financial hardship, you may qualify for loan modification under the administration’s plan. If you live in the home, the principal balance still owed is less than $729,750 and you received the loan before January 1, 2009, you’re eligible. Be aware, however, that you have to prove that you live there, that it’s your primary residence and that you’re having a financial hardship.
If you’re behind on your mortgage or facing foreclosure, I can help you figure out your options. Time is of the essence, so give me a call now at 831.662.6522
1. Obama’s ambitious plan
2. Loan modification
3. Financial hardship