Homeowners have had a tough go at securing both loan modifications and refinancing options from lenders over the last few years. Holding strict credit qualification and high closing cost requirements many lenders have been able to avoid taking part in foreclosure alternative efforts. However, industry changes are on the way that could make it easier for homeowners to qualify for mortgage relief solutions.
As part of the White House plan, refinancing rules and lender practices are being relaxed in hopes of reaching 11 million homeowners that are struggling to make their mortgage payments. Freddie and Fannie are being encouraged to participate in mortgage relief efforts by receiving incentives for eliminating closing costs on refinanced loans and pursuing more loan modification options. FHA loan limits for underwater mortgages are also being raised to include additional homeowner in trouble. In order to help more homeowners, the plan also calls for a relaxation of credit qualification requirements. Since interest rates are at all time lows, the White House is hoping more Americans can benefit from lower payments and help spur some recovery in the housing market.