Government To The Rescue

Congress just passed, and the President signed,
a new law titled Making Home Affordable.

According to their web-site, there are two
separate programs. The Home Affordable Refinance
and the Home Affordable Modification. Details
can be found at www.makinghomeaffordable.gov.

Let's take a look at some of the features.

The Home Affordable Refinance will be available
to 4 million to 5 million homewoners who have a
solid payment history on existing mortgages owned
by Fannie Mae (FNMA) or Freddie Mac (FHLMC).

The targeted homeowners normally would be unable
to refinance because their homes have lost value,
and pushing their current loan-to-value above 80
percent.

Under the Home Affordable Refinance program, many
of them will now be able to refinance to take
advantage of today's lower mortgage rates or to
refinance an adjustable-rate mortgage into a more
stable mortgage such as a 30-year fixed rate loan.
Owner's can refinance up to 105% of the new value
of the home.

This program will end in June 2010.

Eligibility requirements include the following:

1. You are the owner and occupant of a one- to
four-unit home.

2. The loan on your property is owned or secured
by FNMA or FHLMC. To see if FNMA owns your loan try http://www.fanniemae.com/homepath/homeaffordable.jhtml
or 1-800-7FANNIE. For FHLMC use 1-800-FREDDIE or
go to https://ww3.freddiemac.com/corporate/.

3. At the time you apply, you are current on your
mortgage and that you have not been more than 30
days late in the last 12 months.

4. You believe that the amount you owe on your first
mortgage is about the same or slightly less than the
current value of your home.

5. You have sufficient income to support the new
mortgage payments.

The refinance improves the long-term affordability or
stability of your loan. The objective of the Home
Affordable refinance is to provide creditworthy
borrowers who have shown a commitment to paying their
mortgage the opportunity to get into a mortgage with
payments that are affordable today and sustainable
for the life of the loan.

You can contact me to see if you are eligible and
about how this program may work for you

The Home Affordable Modification program will help
up to 3 million to 4 million at-risk homeowners
avoid foreclosure by reducing monthly mortgage
payments to no more than 31 percent of the borrower's
gross monthly income.

Banks and other mortgage providers can begin to
modify eligible mortgages immediately under the
modification program so that at-risk borrowers can
better afford their payments.

Eligibility requirements include the following:

1. The mortgage loans must have originated before
January 1, 2009.

2. They must be first lien loans on owner-occupied
properties with unpaid balances up to $729,750 which
may vary by county.

3. The mortgage payment including taxes, insurance,
and homeowners association dues must be more than
31 percent of your gross monthly income.

4. All borrowers must fully document income. This
would include recent pay stubs, most recent tax
returns, allow for the lender to cross-check the IRS
information, and sign an affidavit of financial
hardship.

5. Property owner occupancy will be verified through
the borrower's credit report and other documentation.

6. Modifications can start from now until December 21,
2012. Loans can be modified only once under the
program.

Be prepared to provide paperwork on the gross monthly
income for all borrowers, information about any
second loans on the home, balances and minimum
monthly payments for car loans, personal loans,
student loans and credit cards.

For information on whether your situation is eligible
for the Home Affordable Modification program, you
will need to contact your existing loan servicing
provider. You should be able find the contact
information on your mortgage statement.