Appraisal Came In Too Low? Try This...

There is a new program out from the Obama Administration that could help lots of homeowners refinance.  It is called H.A.S.P. (Homeowners Affordability and Stability Plan) and the intent is to allow homeowners in declining markets the opportunity to reduce their monthly mortgage payments by participating in the current low mortgage rate environment. 

How To Check Eligibility:
Go to the Fannie Mae website http://loanlookup.fanniemae.com/loanlookup/ and enter your address to see if FNMA owns your loan.  If they do, your loan officer may be able to close your loan. 
If you don't find your property listed there, go to the Freddie Mac web site https://ww3.freddiemac.com/corporate/ and see if they own it. 

• If you neither company owns the mortgage (this is rare), you need to contact your loan servicer to see if they are participating. 
• If Freddie Mac owns the mortgage, you need to contact your mortgage servicer. 
• If Fannie Mae owns your mortgage, you may be able to work with your loan officer of choice. 

Here Are Some Of The Highlights Of the FNMA Program

- Loan to Value can be as high as 105%
- Minimum documentation of one paystub and a verbal verification of employment / self-employed requires most recent year's tax return.
- No minimum credit score, but a score is needed to price the new loan.
- No limit to the number of properties you currently have financed
- All Occupancy and Property Types availalbe (vacation homes, condos, investment prperties, etc.)
- Mortgage Insurance is only required if the existing loan has mortgage insurance.  If you have a 2nd mortgage or home equity line, they cannot be rolled into the new loan - the lender must subordinate (agree to stay in 2nd position). 
- Cash out loans are not eligible

Like all programs, there are other specifics, but those are the highlights. 

H.A.S.P. was announced on February 18, 2009 by U.S. President Barack Obama. According to the US Treasury Department, it is a $75 billion program to help up to nine million homeowners avoid foreclosure, which was supplemented by $200 billion in additional funding for Fannie Mae and Freddie Mac to purchase and more easily refinance mortgages. The plan is funded mostly by the Housing and Economic Recovery Act. It uses cost sharing and incentives to encourage lenders to reduce homeowner's monthly payments to 31 percent of their gross monthly income. Under the program, a lender would be responsible for reducing total monthly mortgage payments (PITI) to no more than 38 percent of the borrower's income, with the government sharing the cost to further reduce the payment to 31 percent. The plan also involves potentially forgiving or deferring a portion of the borrower's mortgage balance. Mortgage servicers will receive incentives to modify loans and to help the homeowner stay current, though participation by lenders is voluntary.