My san jose short sale client was asked me today if I had any more details about the Obama administration’s efforts to help homeowners keep their homes. Honestly, I breezed over the newspaper articles like most people and had not taken the time to do in depth research. I figured I should read up on it a bit more.
The plan is called the Making Home Affordable Program.
There are many complex facets to the program, but I am highlighting what I consider to be important bullet points of the facts.
There are essentially two components to the program that the President Obama’s Making Home Affordable Program has proposed to help most homeowners.
The first component program - Home Affordable Refinance Program to assists those responsible homeowners who are current on their mortgage payments but may be unable to re-finance their loans because they their home value has decreased significantly.
*Have LTV (loan to value ratio of their homes) range from 80-105%
*Borrowers should contact their lenders to see if they qualify
*Borrowers will pay current low mortgage interest rates, plus lender points and fees
*Pre-payment penalties, balloon payments, and cash-out re-financing are not permitted
*Borrowers may re-finance using 30 years or 15 years fixed rates
*Program ends June 2010
To see if they qualify, go to the following link.
http://www.financialstability.gov/makinghomeaffordable/refinance_eligibility.html
The other component program – Home Affordable Modification Program to assist those homeowners who are already behind in their mortgage payments or are facing foreclosure. There is still quite a bit of uncertainty about this program which has not been hammered out as of yet. But here is what is known so far.
*Must be below the conforming loans maximum limit of $729,750
*No minimum or maximum LTV requirement
*Do not have to be delinquent to qualify
*Must have gotten the current mortgage prior to January 1, 2009
*Must be experiencing some type of hardship
*Borrowers must contact lenders to see if they qualify
*Only covers primary residence where the borrower resides
*First, the lender will try to bring down the monthly mortgage payment down to 38% of debt to incomeratio income
*The program will match further reductions in monthly payments dollar-for- dollar, from 38% to 31% of debt to income ratio for the borrower
*Loan modifications can be made until December 31, 2012
To see more details, go to the following link
http://www.financialstability.gov/makinghomeaffordable/modification_eligibility.html
Steve Mun, Silicon Valley Realtor
www.stevemungroup.com
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