Some helpful links:
Obama Housing Plan: What You Need to Know
Home Refinance and Loan Modification Plan
Ambitious Foreclosure Plan Revealed - How Will it Help?
Obama Plan Aims to Help "Responsible" Homeowners
Home Buyers in California Could Enjoy Up To $18,000 in Tax Credits
How to Help Homeowner's Understand Obama's Foreclosure Plan March 4, 2009
Courtesy of: Jake Baker, Pacific Mortgage Consultants, (415) 847-2670
Making Home Affordable Programs
Key Refinancing Qualification Guidelines:
- This program is designed to enable the refinancing of homes that have lost value into today’s lower rates until June 2010
- Across the board $729,750 1st mortgage maximum!
- It appears that restrictions by county were eliminated!
- Homeowner must be able to qualify for and afford the new, lower payment
- Primary residence will be verified by tax return, credit report, & utility bills
- Income verified by one year tax returns & recent pay stubs
- No more that 30-days late on your mortgage payment in the last 12 months
- In other words, no more than one 30-day late in the past year
- Current 1st must be held or controlled by
- Fannie Mae: 1-800-7FANNIE (8am to 8pm EST)
- Freddie Mac: 1-800-FREDDIE (8am to 8pm EST)
- Some details are not as clearly stated as loan mod details...
- For example, 105% LTV for the 1st mortgage was stated in last week's press release
- In other words, if your mortgage happens to be at the new limit - $729,750; but your home value has fallen to $766,237 -- congratulations, you just made it!
- However, I cannot find that same LTV cap in the official release today
- For now, we can assume a 105% LTV is still in effect
- Nor is it perfectly clear how 2nd mortgage lenders will be dealt with
- 2nd mortgage payments will still be in the back end debt ratios
- Will they voluntarily subordinate to the new 1st?
- There is a cash incentive to cooperate in the loan modification program that will be paid by the FED to the 2nd lien holders; perhaps this will be allowed in the refinance program, too
- For example, 105% LTV for the 1st mortgage was stated in last week's press release
Key Loan Modification Details:
- $75 billion to the 3-4 million who are now "Underwater" due to legitimate hardships goes to 2012
- How the FED will monitor on-going hardships still TBD
- Only loans currently owned or controlled by Fannie Mae and Freddie Mac
- Homeowners can go direct to their Lender -- no 3rd parties needed
- Maximum $729,750 home value, and no LTV requirements
- Homeowner DOES NOT have to be delinquent in order to qualify
- Required Docs: most recent tax return; two pay stubs; hardship letter
- Loans are 5-year fixed going for as low as 2%
- Payments will be lowered to 31% of income
- Lenders must drop payment to 38%"
- FED will share the further drop down to 31%
- Example: 1st Mortgage = $500k @6.25% = $3,078/month
- Income = $4,000 per month X 31% = new payment of $1,240!
- Cash incentives will be paid to lenders to cooperate
- Cash incentives will be paid to borrowers, too!
- As long as the borrower stays current on his or her payments, he or she can get up to $1,000 each year for five years paid towards loan principle
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