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Help! I need assistance, in trouble with an Adjustable Rate Mortgage.

By
Real Estate Agent with HomeWay.tv - Keller Williams Realty East Bay 925-337-8489

 

I recieved this email after the President's speech

Mr. Ellis,

My wife and I currently have loan which is an adjustable ARM. We financed this loan back in early 2005. The loan interest rate has since grown from 6% to an outrageous interest rate. We've been doing the best we can to keep it a float; however, I don't know how long we're going to be able to hang on. We'd like to know if we qualify for the Bailout Program that has been announced by President Bush and his staff?

I hope that you will be able to assist in helping us to re-finance or to have our loan reset to the original teaser interest rate of around 6%. We can afford to pay the mortgage at the 6% or better rate, but we will not be able to stay afloat with the inflated interest rates. A quick response with assistance would be greatly appreciated.

Thanks in advance for your time and attention to this matter.

Please contact me soonest!

Respectfully,

Mr. Green

I thought I would take a moment to go over more of the details about the presidents plan and options for help out there.  I have spoken with Mr. Green and we are working to help him with his situation.

The President's mortgage bailout plan is here to help homeowners who will not be able to make thier mortgage payments once their adjustable rate mortgage (ARM) resets to the new higher rate.  The President and his advisors, Secretary Paulson and Secretary Jackson meet with leaders in the mortgage banking business in December 2007 and devised a plan to help borrowers in need.

The plan will Freeze your current rate for 5 years.  This rewards borrowers who opted for a short term rate instead of a fixed rate.  The 5 year freeze will hopefully give people a chance to adjust their budgets and prepare for the increase in payments or have more time to sell the home without the penalty of having the mortgage payment spike up.

To be eligible for the Bailout Program:

  • The home must be your primary residence.  You must live there most of the year.
  • Your loan was taken out between Jan 2005 to July 2007.
  • Your loan does makes its first adjustment between Jan 2008 and July 2010.
  • You can't have more than 3% equity in the home.
  • The mortgage can not be late durring the the period of the initial teaser rate.
  • You must be able to verify all income and show you can afford the payments.
  • You be able to show that you could not afford the payments after the rate adjusts.

What President Bush's Mortgage Bailout Plan does not Cover:

The plan does not help out those whose rate have adjusted before January 2008.  The plan doesn't help those who are currently in need but is designed to offset the impact of adjustable rate mortgages that were issued durring the peek of when these programs were offered.  The plan does not cover speculation buyers or those who purchased homes as investment properties and second homes. If your income was not verified when you got your financing you will need to show that you make enough mone to be able to make the payments.  Many people who are self employed,(the folks the programs were designed for), may not be able to verify enough income to qualify. 

What do I do if I think I'm eligible for the President's Mortgage Bailout Plan?

  • The first thing is to continue to make your mortgage payments.
  • Contact your current Lender and see how they can help you.
  • Gather the documents they request.  (These may include paystubs, bank statements, tax returns and your old loan documents)

What do I do if I'm not covered by the President's plan or my Lender says they can't help?

  • Continue to make your payments.
  • Contact another lender and see if there are other options for your situation.  (There are loans available for up to 125% of your homes value, grants to help bring your mortgage current, and guidelins are changing everyday.)
  • Discuss your options with a professional.  Contact a Lender, a Realtor, a Lawyer and a non-profit housing agency.

Weigh the options you are given by each of these professionals carefully.  Each option will have pros and cons.  Make sure you understand all the pitfalls with your decesion and understand the process for all of your options before you commit. 

Mr. Green's scenario did not fall under the terms of President Bush's Mortgage Bailout Plan.  His lender was also not able to provide him with a viable option.  I am  currently working on options to get his payments on the home under control so he can keep his home.

Danke Schoen,

Nate Ellis

 

 

Comments (3)

R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham
Bank of England (NMLS#418481) - Raleigh, NC
Bob Mitchell (NMLS#1046286)

I guess that something is better than nothing in regards to helping people out who are in this situation.  I wish that they would stop messing around and put together a plan that would put this mess behind us!

 

Bob Mitchell

ValueList Real Estate Services, Inc. 

Dec 10, 2007 08:15 AM
Kevin Hancock
Evergreen Home Loans NMLS 3182 - Poulsbo, WA
The Hancock Mortgage Team
Great post Nate!  I don't think many consumers really understand the President's plan, but even for those who don't qualify there are other options.  The key is to seek guidance before it's too late.
Dec 10, 2007 08:57 AM
Konnie Mac McCarthy
MacNificent Properties, LLC - Cobb Island, MD
Broker/Owner - VA & MD "Time To Get A Move On!"
thanks, i think this is the only post I've read where this was explained in simple terms.....
Dec 10, 2007 09:07 AM