Borrowers Who Are at Risk of Foreclosure Are Asking: "Can the Homeowner Affordability and Stability Plan Help Me?" part 1

Borrowers Who Are at Risk of Foreclosure Are Asking:

1. What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?

The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current. By providing mortgage lenders with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.


2. Do I need to be behind on my mortgage payments to be eligible for a modification?


No. Borrowers who are struggling to stay current on their mortgage payments may be eligible if their income is not sufficient to continue to make their mortgage payments and they are at risk of imminent default. This may be due to several factors, such as a loss of income, a significant increase in expenses, or an interest rate that will reset to an unaffordable level.


3. How do I know if I qualify for a payment reduction under the Homeowner Affordability and Stability Plan?


In general, you may qualify for a mortgage modification if (a) you occupy your house as your primary residence; (b) your monthly mortgage payment is greater than 31% of your monthly gross income; and (c) your loan is not large enough to exceed current Fannie Mae and Freddie Mac loan limits. Final eligibility will be determined by your mortgage lender based on your financial situation and detailed guidelines that will be available on March 4, 2009.


4. I do not live in the house that secures the mortgage Iâ€^TMd like to modify. Is this mortgage eligible for the Homeowner Affordability and Stability Plan?


No. For example, if you own a house that you use as a vacation home or that you rent out to tenants, the mortgage on that house is not eligible. If you used to live in the home but you moved out, the mortgage is not eligible. Only the mortgage on your primary residence is eligible. The mortgage lender will check to see if the dwelling is your primary residence.


5. I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?


Yes. Mortgages on 2, 3 and 4 unit properties are eligible as long as you live in one unit as your primary residence.