The U.S. Department of Treasury announced the Making Home Affordable Plan, as part of President Barack Obama's continuing endeavor to resurrect the U.S. economy. Companies are also helping to restructure mortgages to aid the faltering housing market and in reaction to growing unemployment. The plan is designed to aide 7-9 million homeowners in keeping their homes, and to stop the destructive tide of foreclosures. There are two separate programs, The Home Affordable Refinance and TheHome Affordable Modification - both have been created to help different groups of homeowners.
The Home Affordable Refinance (expires June of 2010) helps:
- 4 to 5 million homeowners
- Fannie Mae or Freddie Mac mortgage holders
- People with proven history of responsibly paying the mortgage
- Homeowners to be able to secure new mortgages despite the decline in their home value
- Those with either fixed rate 30 year mortgages or adjustable rate mortgages, who are being encourage to secure new mortgages to take advantage of the historically low mortgage rates and more stable mortgage options
- Only loans contracted before January 1, 2009 qualify
The Home Affordable Modification helps or requires:
- 3 to 4 million at-risk homeowners
- Reduce monthly mortgage payments
- Work in conjunction with an improved Hope for Homeowners program
- Only loans contracted before January 1, 2009
- Maximum principal limit$729,750 for first-lien loans on owner-occupied properties only
- Owner-occupied properties with 2-4 units that may qualify for higher limits
- Documentation required by all borrowers include IRS 4506-T, two most recent paystubs, most recent tax return, and signed an affidavit of financial hardship
- Ownership of property verification through credit reports, and investor-owned or condemned properties will not qualify
- Financial incentives to be paid to lenders and loan providers who modify the mortgages of at risk borrowers who are currently up to date on their mortgage payments
- Modifications that start immediately and until December 31, 2012
- Only one loan modification can occur under the program
Homeowners seeking to take advantage of these programs can contact loan providers now, as they can start to modify eligible mortgages immediately. Due to the sheer volume of qualified program applicants, please expect delays in response time.For complete program details visit the Department of Treasury.
