Homeowner Affordability and Stability Plan (HASP) Calculator
There sure are a lot of misconceptions about the new HASP plan to fight foreclosures that Obama introduced last week, so I thought I would try to spell it out (as I understand it) using, that's right, a handy, dandy online calculator! Many people seem to think that any random person who bought way more house than they could afford are going to be able to keep it and the government is footing the bill. The plan is nothing like that at all. It will only apply for people who earn adequate income, and are working with their lender to renegotiate their loan to a point where the borrower still pays the vast majority of the payment. The federal government is subsidizing the lender somewhat, since the banks now must steal less money from the borrower, but most of the "loss" is only a paper loss to the lender.
For instance, here is an example you can find at the US Treasury site. If the loan originally was a $207,000 fixed loan at 6.50% on a house worth $260,000 in 2006, then the lender would reduce it to be a fixed $203,575 loan at 5.16% on a house now worth $221,000. This would save the borrower $196/month which could mean the difference between keeping the home and having to foreclose. If you look at these examples, you will see it is not simply a "free handout" to people who bought too much. They are still responsible for making substantial payments, just at more reasonable terms. Anyone interested should read more details on the Treasury site, which spells out the plan in pretty good detail. More people are eligible than they probably realize, since many borrowers who may not consider themselves "over-extended" and who are not on the brink of foreclosure may be eligible. Read the details and find out! Application guidelines will be available March 4.
For instance, here is an example you can find at the US Treasury site. If the loan originally was a $207,000 fixed loan at 6.50% on a house worth $260,000 in 2006, then the lender would reduce it to be a fixed $203,575 loan at 5.16% on a house now worth $221,000. This would save the borrower $196/month which could mean the difference between keeping the home and having to foreclose. If you look at these examples, you will see it is not simply a "free handout" to people who bought too much. They are still responsible for making substantial payments, just at more reasonable terms. Anyone interested should read more details on the Treasury site, which spells out the plan in pretty good detail. More people are eligible than they probably realize, since many borrowers who may not consider themselves "over-extended" and who are not on the brink of foreclosure may be eligible. Read the details and find out! Application guidelines will be available March 4.
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