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Lenders and Homeowners Impacted by Expanded Mortgage Modification Program

More help for those struggling to pay their mortgage is on the way – this time from Washington.

President Obama announced last week that more assistance would soon be available through an extension and expansion of the Home Affordable Modification Program, which provides a break for those struggling to pay their monthly mortgage. The program is aimed at employed homeowners who are still struggling to make their regular mortgage payments.

In particular, the program will be extended through 2013 instead of its previously planned expiration at the end of 2012. A qualifying homeowner can see his or her mortgage payment drop to 31 % of their pre-tax gross income. The program will now expand to property owners who do not live in their homes but instead rent their property to tenants. Also, homeowners who fell out of a prior attempt to complete the program due to missed payments will be given a second chance.

Such changes have the potential to help a number of homeowners in Metro Detroit and throughout the nation as the economy struggles to recover not only jobs but also property values. Additionally, financial institutions holding mortgages might see an increased number of homeowners seeking to modify their mortgages or otherwise lower their monthly payments. The government is using a number of methods to lower monthly payments, including interest rate reductions, refinancing, deferred payment, and mortgage modifications.

The expanded form of the program is expected to be available to homeowners in May. For more information, go to www.makinghomeaffordable.gov

Whether your interest is as a homeowner or a financial institution, this story will continue to be one of significant interest for you as it develops. If you are in need of guidance from the experienced banking, financial, and land use attorneys of Dalton Tomich, please do not hesitate to contact us.

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