Federal Housing Proposal, February 17, 2009

By
Real Estate Agent with Coldwell Banker

Removing a limit on refinancing for "responsible homeowners" 

 

The bill for the New Housing Plan will remove the current restrictions on Fannie Mae and Freddie Mac that prohibits them from guaranteeing refinancing on mortgages valued at more than 80% of the home's value. This allows many more homeowners to refinance at lower rates.

You may qualify if:

            Your Mortgage debt is between 80% and 105% of the value of your home.

            For example:  Your home drops in value from $475,000 to $400,000.  You owe $337,460 at 6.5% on your mortgage.  It has been impossible to refinance because you owe more than 80% of your value.

            Under the new guidelines, you can refinance at a rate of 5.16% saving you $331. per month. 

You don't qualify if:

            Your mortgage debt exceeds 105% of home value.

            Your existing loan is not owned or guaranteed by Fannie Mae or Freddie Mac.

            Your mortgage is above a certain threshold--$417,000 in most areas or as much as $729,750 in higher priced regions.

 

Helping renegotiate loan terms for "at-risk homeowners" 

The bill creates incentives for lenders to modify the terms of subprime and other loans. Participating lenders will reduce payments to no more than 38% of borrower's income, with the government matching further reductions down to 31%.

You may qualify if:

            You have higher mortgage debt than your home is worth.

For example:  Your home's value has fallen from $230,000 to $189,000.  Your mortgage balance is $214,016.  Job loss has reduced household income and your mortgage payment can't be made.

Under the proposal you could modify the mortgage for five years so that payments are manageable, saving over $400 a month.

You don't qualify if:

            Your home is not owner-occupied.

            Your mortgage is above a certain threshold, $417,000 for single-family homes in most areas and $$729,750 in higher priced regions.

            Those who apply more than three years after the program's start.

  

  

THIS INFORMATION IS RELIABLE AS OF THE END OF FEBRUARY, 2009.  

IF YOU ARE IN EITHER OF THESE CATEGORIES, SEEK COMPETENT LEGAL/ACCOUNTING ADVICE!

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