Subprime Mortgage Crisis Solutions Debate - Homeowner Assistance

Homeowner Assistance

A variety of voluntary private and government-administered or supported programs were implemented during 2007-2009 to assist homeowners with case-by-case mortgage assistance, to mitigate the foreclosure crisis engulfing the U.S. Examples include the Housing and Economic Recovery Act of 2008, Hope Now Alliance, and Homeowners Affordability and Stability Plan. These all operate under the paradigm of "one-at-a-time" or "case-by-case" loan modification, as opposed to automated or systemic loan modification. They typically offer incentives to various parties involved to help homeowners stay in their homes.

There are four primary variables that can be adjusted to lower monthly payments and help homeowners: 1) Reduce the interest rate; 2) Reduce the loan principal amount; 3) Extend the mortgage term, such as from 30 to 40 years; and 4) Convert variable-rate ARM mortgages to fixed-rate.

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Other articles related to "homeowner assistance, assistance, homeowner, homeowners":

Subprime Mortgage Crisis Solutions Debate - Homeowner Assistance - Arguments Against Systematic Refinancing
... Such assistance may also further damage the financial condition of banks, although many have already written down MBS asset values and much of the impact would be ... for taking the risk that their contracts may be subject to homeowner bailouts or relief mandated by the government ... As with other government interventions, homeowner relief would create moral hazard – why should a potential homeowner make a down payment or limit himself to a house he can ...
Subprime Mortgage Crisis - Responses - Homeowner Assistance - Homeowners Affordability and Stability Plan
... program to help up to nine million homeowners avoid foreclosure, which was supplemented by $200 billion in additional funding for Fannie Mae and Freddie Mac to ... cost sharing and incentives to encourage lenders to reduce homeowner's monthly payments to 31 percent of their monthly income ... Companies that service mortgages will get incentives to modify loans and to help the homeowner stay current ...

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    But a problem occurs about nothing. For that from which something is made is a cause of the thing made from it; and, necessarily, every cause contributes some assistance to the effect’s existence.
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