Patti Phillips
Prudential California Realty
6119 La Granada
Rancho Santa Fe, CA 92067
Direct toll free: 800-680-9133
Cell: 619-507-2100 Office: 858-481-2020
www.PattiPhillipsRealEstate.com

Friday, December 7, 2007

ARM Adjustment Relief is on the Horizon!

Adjustable interest loans, foreclosures, short sales, defaults....... What are homeowners to do? Relief may be on the way!

As you may have heard, President Bush announced a plan yesterday to help relieve homeowners who are facing adjustments to their ARM loan rates... The plan intends to reduce the number of future foreclosures and mortgage defaults and improve our housing market. Some critics feel it is too lenient. Others feel it is "too little, too late." In any case, help is much needed, and the bleeding needs to stop!

Following is an excerpt from today's San Diego Union Tribune.
"Who qualifies: People with subprime mortgages who live in the residence covered by the mortgage.... Homeowners who appear unable to refinance their loans would be eligible for the fast track to freeze their interest rates for five years. To qualify, they must have a credit rating below 660, must occupy their home and the reset must increase what they owe by at least 10 percent. Those above 660 could still qualify but must prove that don't make enough money to absorb a mortgage rate increase.

Under the plan, borrowers at risk of losing their homes must discuss their options with their mortgage servicers. These firms include giants that manage about 80 percent of affected mortgages, such as Wells Fargo and Countrywide Financial.

The servicers will attempt to determine which people who have kept up with their payments are likely to be able to refinance their mortgage, perhaps into federally insured FHA loans. That will include those with at least 3 percent equity in their homes.

Time frame: Loans must have been taken out between Jan. 1, 2005, and July 31, 2007, and have interest rates that will reset between Jan. 1, 2008, and July 31, 2010.

The problem: Subprime mortgages, many taken out with rates of 7 percent to 8 percent, are scheduled to reset at rates of up to 11 percent. That increase could add $350 to the typical monthly payment of $1,200.

The freeze: Rates will remain at the lower introductory rate for a period of five years."
If you would like more information, give me a call!
You can also access the entire Union Tribune article here: http://www.signonsandiego.com/uniontrib/20071207/news_1n7mortgage.html

I hope this plan is able to provide relief for many of those who so need it!

1 comment:

Todd said...

Thanks Patti,

You explanation of the issue was simple and informative.

Thanks!
Todd