Making Home Affordable Program pushes the nation's largest lenders and loan servicers to lower interest rates for existing or refinancing mortgages. Few local banks are involved in the program, typically, because they no longer own or service the mortgages they originated.
As of October 2009, about 650,000 households nationwide enrolled in the program on a trial basis and only about 1,400 nationwide had made it a permanent status. But the government is accelerating that, announcing plans to convert 375,000 homes into permanent status by the end of the year. The mortgage banking industry added that is also has modified nearly 1 million mortgages in 2009.
Even so, the number of foreclosures continues to rise.
The Program has garnered plenty of criticism over the last six months for not doing enough to halt the foreclosure epidemic. The program is inherently limited. It is voluntary for the banks and helps only the moderately troubled, particularly those with subprime loans. It is best suited for those who are working, but whose payments are just too high for their income.
Those who are truly desperate, such as those who are laid off and have no savings, do not qualify.
Making Home Affordable has two pieces: lowering interest rates on an existing mortgage and refinancing with a new mortgage. A key point is that the program does not lower the principal, only the interest rate.
Here are some guidelines on who may be eligible:
- The loan is owned or guaranteed by Fannie Mae or Freddie Mac. Links to check on this can be found at Making Home Affordable - Look Up Your Loan.
- Not more than 30 days late on a mortgage payment in the last 12 months.
- The amount owed on the first mortgage does not exceed 125% of the property's current market value.
- A reasonable ability to pay the new mortgage.
- The refinance improves the long-term affordability or stability of the loan. Applicants need to bring, at a minimum, proof of income, two years of tax returns, and information on other debt, including credit cards, although many applicants have complained of lengthy and often frustrating demands for more information.
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If you own your property as an investment or a homeowner that has been laid off and have no savings and are having trouble making your payments please contact us so we can help you avoid foreclosure.
Diane and Doug Briggs are experienced successful Sacramento Short Sale Agents covering Sacramento County, including the areas of Elk Grove, Pocket, Greenhaven, Wilton and Galt. Hablamos Espanol. Put our experience, integrity and knowledge to work for you. Call us at 916-956-4912.
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