Don’t Even Try: Exemptions | Loan Modification Part 6

Not a money-making tool

Million-dollar homes will not get refinanced through the government.

In Part 5 of this series, I talked about staying away from scams and keeping your home and your money safe. But struggling homeowners aren’t the only people out there in danger of being scammed.

The government has set limitations on its foreclosure prevention plan to make sure it doesn’t get taken for a ride.

Home means home

First off, the loan modification and refinancing available through the federal foreclosure prevention plan are only available for primary residences. That means if you want to refinance your personal loan on your vacation property in Palm Springs, the government is not going to help you.

Not for the rich

The program also stipulates that you cannot qualify for government aid on primary mortgages of more than $729,500. It’s true that there could be situations in which people legitimately are in danger of losing their almost-a-million-dollars home. However, I think in this case most parties would agree that the best choice is to sell.

Should have known better

Government aid is only available for mortgages that were taken out before Jan. 1 of this year. I guess the feds figure that by that time most people were aware that they shouldn’t take on mortgages they couldn’t afford.

They also want to avoid people buying new homes and moving just so they can get lower mortgage rates through the federal program.

What’s the catch?

Of course, the trouble with only helping people who live in the homes being refinanced could be potential trouble for renters. That is discussed in Loan Modification Part 7.

Feeling lost? Catch up

In case you missed it, Loan Modification Part 1 and Part 2 talked about eligibility requirements for the federal foreclosure prevention plan. Part 3 goes into detail about providing proof of hardship. Part 4 discusses how the federal program works.