This will sound like a commercial for a loan officer,

Banks got a huge bailout from Bush, Congress, and Obama. Billions. The general logic for the bailout was a prevention of global economic collapse of currency and governments.

If too many American banks had failed, the FDIC could not have paid off depositors. That would have been fatal to our system. Our system is deeply complex and intertwined. If banks fail, the government steps in. If the government, FDIC, fails, personal checks start bouncing. Those checks paid or should pay for houses, credit cards, and auto loans. But more than that, for food, heat, and medicines.

With the huge number of checks and electronic payments that would have bounced, basic businesses would have refused to take checks. Checks are the cash of our society. We could never keep our system going on a cash paying basis.

Back to the lead in and title of this post.

President Obama signed the mortgage relief program back in April of 2009 but too few people understand how to save their homes with this tool. The program helps with the refinance of an existing mortgage.

Most traditional mortgage refinances require a loan to value of 80 – 90%. The Home Affordable refinance caps the refinance at a loan to value at 125%.

This means that even if the value of a home has fallen during the housing crisis, there is some hope to escape a toxic home mortgage.

Most traditional mortgage refinances require a credit score of over 620. Using a Home Affordable refinance does not require a minimum credit score.

That means that if your credit score has been damaged by the economy, your credit score will not be a factor in your refinance of a toxic mortgage loan.  a credit score of over 620. Using a Home Affordable refinance does not require a minimum credit score.

That means that if your credit score has been damaged by the economy, your credit score will not be a factor in your refinance of a toxic mortgage loan.

The Home Affordable refinance has no cap on the cumulative loan to value. That means if you have a second mortgage or a home equity line of credit, your new loan won’t be rejected just for having a second mortgage.

There are restrictions such as the current mortgage loan must not be delinquent. If the loan has been late once in the last 12 months, it might be disqualified the Home Affordable Program. (Damn the GOP and the banking lobby for this.)

Other features are both good and bad but banks are NOT PUSHING THIS OPTION AT TROUBLED CUSTOMERS!

Most banks will not lose anymore money by the failing housing market. Mortgage loans, not derivatives, are insured by private companies. Those companies will reinburse a lender if default happens.

The program and the system are complicated, but if someone is barely surviving but can be helped by refinancing a toxic mortgage there is help. It’s just hard to find.

A good start is with HUD and the Home Affordable home pages.

There is hope. Ask us.

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