Due to high rates of house foreclosures that are happening in most parts of the country – President Obama has announced a new initiative called the Making Home Affordable Refinance And Loan Modification Program which is basically a homeowner stimulus package. This plan is designed to help homeowners who are having tough financial problems to keep their homes and avoid foreclosure.
What is the Making Home Affordable Refinance and Loan Modification Plan?
It is a financial plan sponsored by the government to help millions of Americans to refinance their home mortgage in order to avoid foreclosure and losing their homes. It is primarily to help the following people:
- Homeowners who are current in their mortgage payments but can’t refinance their mortgage because of lower house value.
- Workers who have been laid off or reduced hours and are having a hard time making mortgage payments.
I’m current on my mortgage – will I qualify for refinance?
If you are a responsible homeowner that is:
- Current on your mortgage payments.
- Mortgage is more than 80% of the house value but less than 105% of the house value. [edit July 20, 2009 - check out the new LTV criteria for the making home affordable program.]
- Conforming loan with Freddie Mac or Fannie Mae.
- Can’t refinance to take advantage of lower rates.
- Sufficient income to make new lower mortgage payments.
This plan will allow you to refinance your mortgage into a 15 year or 30 year fixed mortgage at a lower interest rate to make the monthly payments more affordable. The purpose of refinancing the mortgage is to lower the monthly payments. This can also applies if you have second mortgage on the house.
My mortgage payment keeps rising and I can’t afford it anymore!
The stability aspect to this plan will help homeowners who are facing rising mortgage payments due to resetting rates to keep their homes. If you are homeowner who is current on their mortgage but about to default on the payments then the following might apply:
- Reduced monthly mortgage payments.
- The monthly payments will be lowered so they are no more than 31% of income.
- This reduction will apply for 5 years after which the rates will gradually return to the original level.
- Up to $1,000 per year for 5 years in loan reduction paid for by the government if the mortgage stays current.
When does the refinance plan start?
The homeowner plan starts on March 4, 2009 when the final details will be released. Mortgage lenders will be contacting eligible homeowners after this time. Please contact your mortgage provider if you have any inquiries.
What paperwork do I need?
- Income documentation – pay stubs or other proof of income.
- Most recent tax return.
- Payment amounts for any outstanding credit card balances.
- Payment amounts on any other loans you have such as car loans, student loans, personal loans.
- If there is a second mortage then you need to provide information on that.
Top 5 foreclosure states in January, 2009
- Nevada 1 in 76
- California 1 in 173
- Arizona 1 in 182
- Florida 1 in 214
- Oregon 1 in 357
Other info
$8,000 first time home buyer credit extended.
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We qualify on all guideline provisions for a loan modification except the date of the loan origination is 02/09 and not 01/01/09. Can the loan servicer (B of A) make exceptions?
Thank you very much
I did a loan modification with Bank of America on Feb/2009, and now I am current on my mortgage, but still is hard for me to pay my mortgage payment. i just wondering if I can do a loan modification with bank of America for the second time in a year.
I’ll appreciate for your help
I am two payment behind on my loan, due to a loss of employement. My financial situation is now under control and I would like to refinance, is there going to be a lender out there that I can refinance with or should I try for a loan modification with my mortgage company? I have about 90,000 equity in the house, I would just want to borrow $10,000 to get back on my feet.
Thanks for your help.
I’m in a fix as well. I’m a divorced mother to two and I’m behind on my mortgage now 3 months and tried to get assistance through my mortgage holder. I inquired about the homeowners stimulus assistance programs and was told that it only applied to Freddie Mac or Sallie Mae not FHA loans. I was out of work for 6 months and have a part-time job now. What can I do? My home fortunately is worth $150,000 and I owe $120,000. I either want to refinance or borrow enough to bring my mortgage up to date. Because of my unemployment status and inability to keep up with anything other than my basic necessities, my credit rating plummeted. Am I just going to become another statistic or what if anything that can be done to help people in my situation? I’ve been in my home for 6 1/2 years and weant to keep it. Thank you
OK so im young and starting to struggle, ive used all my rescources; mortgage mod (which didnt help any), cut out all my unnessacery bills, work as much as i can and am really starting to get behind. as of dec 2009 im current on all my bills and mortgage but this may be the last month, im engaged and am expecting my third son by christmas, this is a plee for help, i dont even know where to begin and finding help is definetly not as easy as it should be. any suggestions or advice would be appreciated.
Are there any refinance programs for unemployed people who are up to date on their mortgages, and want to get their rate reduced? I would think that there should be something to help people who haven’t defaulted on their mortgages, but have lost their jobs. Most lenders will not refinance these loans. If the payments are lower, people would be more able keep them current.
I have an FHA loan and was already denied by an FHA lender. It is a first mortgage, and there is equity in the home.
An Emergency Mortgage Assistance plan (HEMA), to DIRECTLY help Unemployed homeowners avoid foreclosure, is now one step closer to being passed by Congress!
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http://www.dsnews.com/articles/congressman-fattah-wins-house-approval-for-emergency-mortgage-relief-plan-2009-12-14
I haved owned my home since 1986 in Carpinteria, Ca. I have recently become disabled and recieve Ca. Disaility at 1045.00 per month. I also recieve $611.00 per month for my minor child, as her father, and my former husband, became disabled in 1994 from a brain injury. II have been very ill for the past 5 years, and have only had minimal employment. I also recieve 985.00 per month for the ental of a small guest unit on my property.I started on the Loan Modification Program with Bank of america in August 2009. When I was laid off, and then urged by faamily, friends and my primary care physician to apply for disability, I did so. I also applied for Federal Social Security Disability, which would replace the State Disaility. When I called Bank of America to let them know I was on diability and nable to work ( my prognosis is poor)), they informed me I would be transferred to a “new” program”
called “forebearance” which as I understand it means they would “forgive” my past payments ( I always send something, but not the full amount. My current mortgage payment is 2500.00 per month, interest oly, adjustable, includes Tax and Insurance) the total loan note is 560,000.00. When I was in the loan modification, Bank of America was talking about a 1500.00 per month payment including tax and insurance. The forebearance program will not help me, I need a fixed and affordable onthly payment. I could pay 1500.00 per month. My additional income is 2000.00 per year, a gift from my father for Christmas and birthday. Can you advise? I have called and written so many people, including my lender. ( I am also in a debt consolidation program with a non profit debt counselling service to pay off my credit card and a 1000.00 line of credit at my bank) This payment is 260.00 per month.
Thank you
J. Millan
805-684-8381
Bruce Wynn, My name is Shelly White and I am a Realtor in Texas. I am researhing some information and came across you post. I want to tell you first contact your loan company and explain your situation and ask for resolution. Also explain to them that you want to keep your home. You do have a hardship because your Mother is ill. I pray for that she gets better by the way. To answer your question based on my experience with loan modifications you must reside in the home, it must be your primary residence. to qualify. for the HAMP program. Once you return to your home, you should apply for a modification. Since you are away ask for a forebearance and when you return immediately apply for a loan modification under the HAMP program which Freddie Mac participates. This program has information on http://www.makinghomeaffordable.gov.
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