Wednesday, April 29, 2009

Underwater Homeowners: Help Is On The Way

One gaping hole in the Obama administration's “Making Home Affordable” loan modification program is that it didn’t help three categories of homeowners: 1) those whose loans were not held by Fannie Mae and Freddie Mac; 2) those whose first loan amount was more than 105% of the appraised value; and, 3) those who held a second mortgage on the property.

Now, help is on the way, and the neediest cases – those homeowners who are seriously “upside down” and owe more than 105% of the value of their property – are getting backing from the government.

Banks holding 2nd mortgages on these underwater properties are getting incentives to reduce interest rates to as low as 1% for five years or in many cases to write down the 2nd loan value in its entirety to help owners stay in their homes.

The President and the country's legislators, including California Assemblyman Ted Lieu (D-Torrance), should be applauded in their efforts to stand behind the people and to help remedy the nation's foreclosure epidemic.

Read today's Los Angeles Times article.

Read the Making Home Affordable Second Lien Update dated April 28, 2009.

Read the Treasury Department Press Release on the Program.