The government released a program a few months back called the Making Home Affordable Plan. This plan was quickly critisized for being, again, too little and too late. This plan would allow homeowners whose mortgages were backed by either Fannie Mae or Freddie Mac, to refinance to a new fixed rate mortgage even if their house was upside down, meaning they owe more than the house is worth.
There are two main problems with this.
First of all, not everyone's mortgage is owned by Fannie Mae or Freddie Mac. This left many homeowners in the cold, still searching for help.
Second, they capped the amount that you could be upside down to only 5%. This means that if your house is now worth $100,000 you could anly have a mortgage of $105,000 or less. ( 5% more than the home value )
Yesterday Fannie Mae release an expansion to the plan that is sure to help many. They have expanded the ratio of loan balance to home value up to 125%. This is a great improvement.
Using our example above if your home is currently worth $100,000 and you mortgage balance is $125,000 or less, you may qualify for this new refinance program.
The first thing you need to do if you want to see if your house will qualify is to find out if your mortgage is backed by Fannie Mae. Click on each of the link below and enter your information.
If your mortgage is found to be owned by Fannie Mae, and you think your mortgage is 125% or less of the home value, give me a call and lets see if we can get this done for you.
I have attached the official announcement from Fannie Mae below for your review.
Please let me know if you have any questions or to stay informed, JOIN MY BLOG!
|July 1, 2009|
|Fannie Mae Implementing New Loan-to-Value Ceiling for Home Affordable Refinance Program;
Loans Eligible for Delivery September 1
WASHINGTON, DC -- Fannie Mae (FNM/NYSE) announced today that the company is providing information to servicers regarding changes to the Home Affordable Refinance Program (HARP) that permits refinancing of existing Fannie Mae loans with loan-to-value (LTV) ratios up to 125 percent. The loans will be eligible for delivery on or after September 1, 2009.
"This step aims to reach even more borrowers who would benefit from a lower payment," said Michael J. Williams, President and Chief Executive Officer. "Many borrowers in good standing have been shut out from the benefits of refinancing due to significant declines in property values across the country. By broadening the scope of the initiative, more borrowers will experience savings on their monthly mortgage payments and have a better chance of sustaining homeownership over the long term."
Previously, HARP allowed for refinancing of Fannie Mae loans with LTVs up to 105 percent. With the expansion, loans with LTVs above 105 percent and up to 125 percent will be eligible for refinancing through the company's Refi PlusTM manual underwriting option. For loans with LTVs above 105 percent, borrowers must refinance through their existing servicer and the new loans must be fully amortizing fixed-rate mortgages with terms greater than 15 years up to 30 years.
In conjunction with the LTV eligibility expansion, Fannie Mae will offer a special .50 percent reduction in the loan-level price adjustment charged for loans with LTVs above 105 percent and loan terms of 20 and 25 years. The reduction is intended to incent borrowers to select shorter terms and build positive equity in their homes sooner than with a typical 30-year mortgage.
HARP is part of the Administration's Making Home Affordable plan aimed at stabilizing the housing market, helping Americans reduce their mortgage payments to more affordable levels, and preventing avoidable foreclosures. For more information, visit www.makinghomeaffordable.gov.
Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers.Our job is to help those who house America.
Refi Plus is a trade mark of Fannie Mae. Unauthorized use of this mark is prohibited
|Fannie Mae Resource Center||Telephone 1-800-7FANNIE