Obama mortgage plan - Making Home Affordable : Bad Credit Advisor

Obama mortgage plan - Making Home Affordable

Q: Heard about Obama mortgage plan from a friend. Is that the same as Hope for Homeowners? Who qualifies? I am facing foreclosure ... likely, need to do something and fast.

A: What is called Obama mortgage plan is the government sponsored refinancing/modification program. This plan and The HOPE for Homeowners or H4H are two completely different things. The H4H was created by Congress and is effective from October 1, 2008 to September 30, 2011. Its goal is to help homeowners like yourself who are about to become delinquent, to refinance into more affordable mortgage. If you are having trouble making your mortgage payments, HOPE for Homeowners may refinance your loan into a new 30- or 40-year fixed rate mortgage with lower payments. While it sounds good, you must be aware of costs and conditions. I will post about this program shortly. Now, the Obama mortgage plan -

The program is called Making Home Affordable and supposedly should help some 9 million homeowners keep their homes and avoid foreclosure through mortgage refinance or loan modification program designed to lower monthly mortgage payments. To qualify you must be current on your mortgage payments. More specifically, to refinance under the guidelines of Obama mortgage program, you must not have been more than 30 days late on any mortgage payment in the last 12 months. Only your primary residence is eligible of course, so if you rent the property in question, no Obama mortgage for you. I don't think that the second residence, like a vacation house is eligible. Wells Fargo is the first lender which offers Making Home Affordable plan.

The guidelines for mortgage refinance under this plan are as follows:
- must be your primary residence, including 1-4 unit homes, condominiums, and manufactured homes
- the existing mortgage must be secured by Fannie Mae or Freddie Mac - check by calling 1-800-7FANNIE or 1-800-FREDDIE, or by vising these Fannie Mae and Freddie Mac look-up web pages
- no late payments in the last 12 months
- must have stable, sufficient income to qualify
- your first loan amount cannot be more than 105% of the value of your home
- your loan will be refinanced into 15 or 30 year fixed rate mortgage with the interest rate based on the market rate on the day of closing
- no prepayment penalties, no balloon notes permitted
- you, the borrower pay all refinance costs

The guidelines for loan modification under Obama mortgage plan are as follows:
- must be your primary residence, including 1-4 unit homes, condominiums, and manufactured homes
- must demonstrate significant hardship such a loss of an income, so if you have enough liquid assets to pay existing mortgage, don't bother to apply
- the mortgage in question was originated on or prior to January 1st, 2009
- the unpaid principal balance is equal or less than the following:
$729,750 for one flat
$934,200 for two-flat
$1,129,250 for three-flat
$1,403,400 for four-flat
- you can only modify a mortgage once under the plan
- your front end debt to income ratio must not exceed 31%
- back end debt to income ratio better not to exceed 55%, otherwise you must talk to a HUD-approved counselor who may or may not approve you
- the loan modification lasts 5 years and once your interest rate is temporarily lowered, it can go as low as 2.0%, but can not go higher that the rate on the day of the modification - and goes back to the market interest rate after 5 years
- you pay no mortgage modification fees

You should visit official Making Home Affordable site and may be find a HUD counselor to see if you qualify for Obama mortgage plan. I don't know your situation, so meanwhile, also check credit score for FHA loans as well as FHA loan requirements and qualifications.

Tue Apr 28, 2009 12:04PM by Tony | More in Mortgage | Comments (0)

Helpful Links

Syndicate

Subscribe in a reader