Who's Eligible For Obama's Mortgage Plan?

(CBS)  On Wednesday, President Obama laid out a $75 billion plan to help millions of Americans refinance their mortgages and avoid foreclosure. So who qualifies and how can you benefit?

Early Show financial adviser Ray Martin answered some questions from Early Show co-anchor Harry Smith as well as the public.

"Listening to the president yesterday, really two tiers of people they are seeking to help here. Explain who might get bailed out," Smith said.

"There are two parts of the program -- loan modification and loan refinancing. On loan modification, this is aimed at folks that are in dire straits. Their monthly mortgage payment far exceeds 31 percent of their pre-tax monthly income. It might be 50, 60, 70 percent of their income; it's not sustainable to keep paying that. This provides government subsidies and incentives to financial institutions to chop down their interest rate, possibly lower their principal, even stretch out the mortgage to bring the monthly payment down to 31 percent of their pre-tax income," Martin said.

"And the other group that is about to be helped are all these folks who are going under water," Smith said.

"This is folks who are current on their payment. Their monthly payment is 31 percent or less of their pre-tax income. They'd like to refinance to take advantage of a 5 percent interest rate, but they can't because the value of their home is at or slightly below what their mortgage is. So, the mortgage might be 105 percent of the value of the home and shrinking. They'd like to refinance, but for that obstacle, now those with underwater loans, slightly underwater or significant size loans can refinance and get that out of way," Martin said.

"When will people be able to get a piece of paper and fill something out and be able to make this work for them?" Smith asked.

"According to the fact sheet released by the White House yesterday, the details of this program will be announced on March 4th, next month, and they're going to be able to call their lender and say, 'Am I eligible for a loan refinance or modification?' In the meantime, get all the financial documents in order and get ready to call the lender," Martin explained.

Martin also answered a few questions from the Early Show audience. To watch a video of the segment and that Q&A, click the play button below:

[dsys4me]

I would like to know what 'credit' is being given to those who have held to their mortgage commitment and are making their mortgage payments???? What's the benefit of being responsible??????

[CraigBerkeley]

The Mortgage Fraudsters certainly do not deserve a bail-out! Incredible deals in foreclosures for investors? I don't think so. There's blood on the abks hands from their three million illegal foreclosures and counting!!

Is Your Lender A Patriot Or Terrorist?
http://reno.broowaha.com/article.php?id=3462

Beware Of Fraudulent Foreclosure Notices
http://reno.broowaha.com/article.php?id=3825

Many of these Notices of Default are not real, they are fraudulent and they are just another way to steal houses. Then the fraudster ?sells? the stolen house under a fraudulent Trustee?s Deed.

Rachel And Her Children: Homeless Families In America @ http://reno.broowaha.com/article.php?id=3206

The illegal three million foreclosures have also added to the homeless despair.

illegal Is Your Lender A Patriot Or Terrorist?
http://reno.broowaha.com/article.php?id=3462

Just Do The Required Home Loan Modification
http://reno.broowaha.com/article.php?id=4070

Beware Of Fraudulent Foreclosure Notices. Many of these Notices of Default are not real, they are fraudulent and they are just another way to steal houses. Then the fraudster ?sells? the stolen house under a fraudulent Trustee?s Deed. http://reno.broowaha.com/article.php?id=3825

Reno, Nevada?s Countrywide Home Loans manager Sue Barry should also be charged with Mortgage Fraud, along with Prudential Nevada Realty former Regional Manager Valerie Mapes, former Prudential Nevada Realty Realtor Keith W. Gledhill, Mortgage Fraudster Reno landlords John and Kay Sickler, Mortgage Fraudster Reno escrow officer Jenna Kay Clark and her company Reno?s First American Title, Reno Realtor Allan Zane and his Broker Magi Bird, and Reno?s First American Title.
http://reno.broowaha.com/article.php?id=3415
http://reno.broowaha.com/article.php?id=3300
http://reno.broowaha.com/article.php?id=3320
http://reno.broowaha.com/article.php?id=3351
http://reno.broowaha.com/article.php?id=3372
http://reno.broowaha.com/article.php?id=3377
http://reno.broowaha.com/article.php?id=3397
http://reno.broowaha.com/article.php?id=3404
http://reno.broowaha.com/article.php?id=3421
http://reno.broowaha.com/article.php?id=3430
http://reno.broowaha.com/article.php?id=3448

For copies of the supporting documents that have been uploaded, see http://renomortgagefraudexposes.ning.com/

[joe386]

Santelli wasn't just talking about tossing tea leaves, he was READING the tea leaves.

The govmint is on lethally shakey ground here if they don't realize what "jingle mail" and "rational default" fundamentally mean in terms of their potential to permanently change the "social contract" and, thus, the foundations of the real economy.

The anger building over this is incredible, and this dumb plan by President Obama misses the mark again big-time.

The only way out of this is to substantially lower monthly payments for those who are paying their mortgages, while those who are not go into foreclosure.

Lower monthly payments for current borrowers with increased tax deductions for mortgage interest and tax credits based on downpayment amounts. If the government does not free up those who have the financial ability to hang on by the skin of their teeth in this market, it is blowing up the only goose that might still be able to lay a few golden eggs.

The Obama plan is hideous so far.

[joe386]

Two keys here: programs must (1) "reward" those who stay current on their mortgage --- (what a joke--after Frank, Dodd et al ruined the global economy, we have to beg our govmint not to reward losers, but to free up those who actually make this country work) --- and (2) substantially facilitate those who do have money (income and assets) to feel more free to spend a little of it.

It is the extreme contraction in discretionary consumer spending that will determine whether this recession becomes the next Great Depression. People who have suffered 50% declines in their retirement accounts and 50% declines in their home values are just not going to spend money even if they have it. Not only that, now they are getting ANGRY.

A person who put $120,000 down on a home that now is worth $500,000 less than he paid for it three years ago has lost WAY more---and his loss has had WAY more of a negative impact on the economy---than the person who put ZERO down on his home, has been living in it "free" (in deliquency) for several months now, and who will get his debt forgiven by the government.

Wow, so the second person never has to pay what he could never pay in the first place. Big whoop. But the person who paid a lot of money down, and is still paying on a devalued home, is just supposed to eat that loss---AND pay for the losers to boot.

[joe386]

Billions to Fannie Mae and Freddie Mac? More money down the subprime rathole, where mortgages already have a 50% RE-default rate?

Simple, across-the-board provisions to restore liquidity at the housing consumer level:

1. Quadruple the home mortgage deduction for every homeowner who is current on his mortgage at the end of the year; set this provision to be in effect for at least ten years;

2. Provide a one-time tax credit equal to 20% of a TP's mortgage balance at the end of the year in which the credit is taken (one credit per household); set this provision to be in effect for ten years, with ten year carry-over;

3. Create a provision that allows TPs current on their mortgage to recognize a tax loss equal to the amount of cash downpayment they made on their current, primary home; make the provision in effect for ten years with a ten year carry-over.

4. Create a federally funded "second trust" program available to any homeowner who could refinance (meets all criteria) but for the fact that his home no longer meets 80% LTV ratio (b/c of the stupid other guy loans dragging down all home prices and the government insuring those stupid loans and thus creating a market for worthless paper and credit default swaps). Have the govmint either give the 20% outright to the lender so the borrower meets LTV or have the govmint give a second trust at an extremely low rate to meet LTV.

[lightnin001]

Clinton, Dodd, Franks, and the "democrats" pressured banks and savings and loans to make home loans to unqualified buyers. The banks gave those buyers low down-payment, rising rate mortgages which they couldn't afford when the rates went up. Now Obama and the democrats are bailing out the banks, AND those unqualified borrowers, using the taxes from the people who bought wisely and DO pay their loans! The decent, honest, hard-working taxpayers get stuck with the bill for it ALL! But we have long memories, and we'll remember who did this to us! See you in two years, democrats!