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Mortgage Delinquencies Rising September 30, 2009

Posted by John Watch in News Feed.
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The housing market needs mortgage assistance. As we push towards recovery, the rising delinquency rates from borrowers remains the elephant in the room. Today’s news of Fannie and Freddie Delinquencies Moving into Uncharted Territory highlights this point. According to the article, the delinquency rate in single-family home loans backed or held by Fannie Mae crossed over 4% in July for the first time. Freddie Mac reported a rise to 3.13% in August. As loans approach recasting for many borrowers – especially borrowers with “Alt-A” loans – potential recovery in the market will dampen.

This Mortgage Assistance Program looks to curtail rising foreclosure rates by keeping homeowners in their homes. If structured correctly, homeowners can sustain a monthly mortgage payment. Here is an example of how it can work:

• Mr. and Mrs. Z have a mortgage payment of $1,170 ($200,000 loan with 30 year payout at 5.75% interest).

• The Z’s lose their job and can only pay $470, so the government pays the difference of $700

• The Z’s remain homeowners and work through their problem. It takes the Z’s 10 months to get back on their feet, the government paid out $7,000 and now the Z’s owe the government.

• But the government says okay, you can start paying us back in seven years and the payment will be over 10 years at an interest rate of 3%.

See the rest of the Program here. While there are some obstacles to overcome with this program, it can be done.

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1. New Bill to Help Homeowners with Foreclosures « AccuriZ - October 1, 2009

[…] Mortgage delinquencies are rising and the voluntary HAMP program implemented so far is slow to repair the damage. Mortgage Assistance Programs have been created to weather the mortgage storm, but little remains resolved. The Preserving Homes and Communities Act of 2009, headed by Senator Jack Reed (D-RI), aims to aggressively curtail this situation threatening a recovery. […]

2. foreclosure listings - October 1, 2009

Well the program is good and may work. But it’ll be a trouble for gov. if too many people start depending on it


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