Will the Next New Loan Modification Program Help YOU?

There is a new loan modification program in the works, and it promises to help struggling homeowners despite income level, credit history or loan to value ratio. Sound too good to be true?

The new program plans to allow for 30-year fixed rate mortgages at the prevailing rate (which currently is between 4 and 4.5%) for those homeowners who need to refinance government-backed loans. These include Fannie Mae, Freddie Mac,  Ginnie Mae, FHA and VA loans. Approximately 30 million U.S. homeowners will be eligible for these modifications.

Will it work? This is the most liberally created plan induced to date, and we will have to see as more details become available exactly how it will work. Obviously, allowing blanket loan modifications to so many homeowners without regards to credit, income or current loan to value ratios is extremely risky for lenders, and it will be a tough battle to push the legislation through Congress. However, if this program sees the light of day it could have enormous healing consequences for the housing market.

I will keep you posted as soon as I learn more.

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