March 2009 Vol. 4 No.3
• Can President Obama's
Housing Plan Help You?
• March's Home Value Improver • About Us

Can President Obama's
Housing Plan Help You?

Times are tough. Even if you have tried to avoid the doom-and-gloom reports of the terrible state of the American economy, you still probably know that it is shaping up to be the "perfect storm" for hard- working families. Housing prices are falling, so spending is decreasing, so people continue to lose their jobs. Job loss or income decline make it harder for people to pay their mortgages, but lower housing values make selling an unattractive option.

Even refinancing is challenging because banks don't care about the amount you have paid into your mortgage as much as they care about the amount you owe on the value of your house.

Example: Let's say you bought a $600,000 house and you put down $200,000. You were probably feeling pretty good about yourself - and with good reason. You had to borrow only about 65% of your home's value. However, if your home value has dropped to $400,000, you now owe 100% of your home's value. Banks would prefer not to lend to people who owe more than 80% of the value of their home.

As many as 6 million families still could be facing foreclosure. Obama's Plan, called Making Home Affordable, will help between 7 million and 9 million Americans.

What I like about this housing plan is that unlike many attempts at fixing things, this one is proactive. If paying your mortgage has become difficult because of job loss or income decline, but refinancing is not available for you, President Obama's Plan may help.

Here are some of the specific people who will be helped:

  • Homeowners who are having trouble making payments but have not yet missed a payment are eligible.
  • Homeowners who live in the home in question as their primary residence.
  • Homeowners with mortgages lower than $749,750.
  • Homeowners whose total debt, including car loans and credit card debt is 55% or more of their income - but only if they participate in HUD debt counseling.
  • Those who want to refinance to a lower mortgage rate but do not qualify because the amount they owe on their mortgage compared with their equity precludes them.

What kind of help will the Plan provide?
Plan architects hope to spread the burden of helping families among everyone involved including families, the government, banks, lenders, and others.

Homeowners facing foreclosure can have their payments reduced in ways other than refinancing, too. There are also incentives in place that will discourage banks from foreclosing as quickly as they might have before.

Contact your mortgage professional to find out if you are eligible for assistance under the new plan.

March's Home Value Improver

7 Steps to Successful
Spring Cleaning in the Kitchen

Yes, the first day of spring did arrive amid little fanfare last week, despite the cold temperatures. If you are anxious to get started on some springtime activities, but realize that garden planting is still weeks away, why not get started with some spring cleaning?

Since the kitchen is the place people spend most of their time and the one that tends to get the dirtiest - and I can't bear to write about cleaning bathrooms - let's start there.

  1. Surfaces
    Wipe down the walls, including the corners, with a soft rag soaked with warm water and a cleaner. Don't forget the ceiling fan, as well as the blinds, and any knick knacks and pictures. (Be careful not to get water in the corners of the pictures or it can leak onto the photo.)

  2. The Oven
    If you are like most people, you can count on one hand the number of times you have cleaned your oven. If you have a self-cleaning oven, be sure to open a window in case it gets smoky or odorous in your kitchen.

  3. The Pantry
    While the oven is cleaning itself or the oven cleaner is doing its thing, take a look through your pantry. You may be surprised to find several boxes with only a few stale crackers taking up valuable kitchen real estate.

  4. The Refrigerator
    Like the pantry, now is a good time to reevaluate what is taking up that valuable space. After cleaning out the food, wipe down the shelves (most are removable) and the sides. If you're super ambitious, you could even unplug the refrigerator and vacuum around the coils on the back.

  5. The Dishwasher
    She sure does a lot for you, so help her out by running some baking soda or vinegar through the dishwasher when it is empty.

  6. The Garbage Disposal
    Chucking an ice cube down the garbage disposal is not only entertaining, it actually helps sharpen the disposal's blades. Some baking soda or lemon will keep it smelling fresh, too.

  7. The Drawers
    How the silverware drawer collects crumbs is a mystery, but it happens. Clean out your silverware drawer, and move on to those junk drawers. Pare down drawer contents, wipe out the bottom, and perhaps even install some shelf liner.

Everyone is talking about refinancing these days. You may have heard a colleague or friend bragging about the rate in the 4s that he or she landed recently.

There definitely are some good rates out there, but as always, getting them depends on a lot of factors - are you willing to pay points? Has the value of your home dropped considerably? Is your credit as strong as it could be?

If you think you may qualify for housing related help under Obama's plan or you would like some details about what refinancing may look like to you, please feel free to give me a call. I'm always happy to do some research and get you the facts you need!

Best regards,
Debbie Siegel
Westchester Mortgage

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