Foreclosure Refinance Option For Troubled Mortgage Borrowers
The number of homes that are up for foreclosures has risen tremendously due to the recent economic turmoil. It is a good thing that foreclosure refinance options are now made available to consumers and mortgage borrowers.
Increased Volume Of Foreclosures
It is estimated that about 2.5 million homes across the United States fell into foreclosure during the aftermath of the recent economic recession. The Center for Responsible Lending attributed this to the burst of housing bubble, which came at the same time, unfortunately, with a drastic increase in the unemployment rate. Foreclosures came as consequence of the domino effect created by the economic and housing industry trouble.
There are many new types of loans that have been introduced in response to the increasing number of mortgages that fall into foreclosure. The most significant and timely of those are those that are so-called foreclosure refinance loans. In the US, such credit facilities are offered to many homeowners who are finding it hard to face their current mortgages due to the impact of the economic crisis.
The Stimulus Bill
US President Barack Obama launched in 2009 his stimulus bill, which is formally called the Recovery and Reinvestment Act. The legislation made way for a foreclosure refinance loan type that would facilitate refinancing of existing mortgage loans, specifically those that are on the brink of foreclosure. The Act is aimed principally at helping Americans who were directly hit by the recession to keep their respective homes.
The stimulus bill is worth about $787 billion. It is distributed through many other types of loans to American consumers, who were very much affected by the recent crisis. One specific type of loan that could be categorized as foreclosure refinancing loan is offered through a scheme called Making Home Affordable Program.'
Generally, foreclosure refinance loans are offered to homeowners who have suddenly realized that today, their homes are actually less in valuation compared to the amount of their mortgages. This is an inevitable and grim reality because valuations of homes fell dramatically amid the weakening housing market. Without a surprise, many American mortgage borrowers suddenly were unable to afford their own mortgages due to the plummeting house prices and the increase of jobless claims.
Applying For Such Loans
Homeowners could now apply for foreclosure refinance loans. Such credit facilities provide eligible homeowners with lower mortgage rates. The loans also facilitate modifications for adjustable-rate mortgages, which could be adjusted into preferred 30-year fixed mortgages. It is logical that foreclosure refinancing loans are providing mortgage borrowers and homeowners more leverage so that they could better cope up with the situation.
However, there are eligibility requirements set for anyone to qualify for such foreclosure refinance loans. If you intend to qualify for one, you should ask your local government as well as accredited home loan providers. You should be prepared to be subjected to due diligence prior to taking refinancing options available. The program would end on 2012 so hurry up.
Foreclosure Refinance Option For Troubled Mortgage Borrowers
By: Julian Lim
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