THE ASHLEY LEIGH TEAM – MAKING HOME AFFORDABLE –

25 06 2010

I am pleased to provide clarification about the new Federal government new information website. 

The Federal government has launched a new website allowing homeowners to conduct a self-assessment of their eligibility for participation in the “Making Home Affordable” loan modification and refinancing program. 

The Federal website shares information about how this program works and who is eligible for assistance.  This is the same $75 billion program you may have heard of recently in the media.

Presented below is a description of the eligibility requirements.

There are two programs being offered.  One focuses on refinancing and the other on loan modification.

REFINANCING

With interest rates at all time lows many homeowners wish to refinance.  However, the values of their homes have declined such that there is insufficient equity to get a new loan.

That’s where the refinance program kicks in.  But, there are some qualifying criteria.  ALL of the answers to four questions must be yes.  Otherwise, this Federal program will not provide assistance.

  1. 1.    Is your home a one- to four-unit home?

The Federal website is not clear if your home must be your principal residence.  I am pretty sure that’s what they mean, however. 

  1. 2.    Is your current loan owned by Fannie Mae or Freddie Mac?

Too keep money flowing lenders sell their loans to investors. If your loan has been acquired by an investor other than Fannie or Freddie, then this Federal program will not provide assistance.

You can learn if your loan has been acquired by Fannie Mae or Freddie Mac at their respective lookup websites.

  • Visit Fannie Mae’s loan lookup website à

                                        http://loanlookup.fanniemae.com/loanlookup/

  • Visit Freddie Mac’s loan lookup website à

                                          https://ww3.freddiemac.com/corporate/

  1. 3.    Are you current on your home loan payments?

“Current” means you have not been more than 30 days late on any of your home loan payments in the last 12 months.  Tardy on just one payment and you are not eligible.

  1. 4.    Do you believe the amount you owe on your first mortgage is about the same or less than the current value of your house?

Your loan coupon usually shows the current loan balance. Or you may have to call your lender or check on your lender’s website to learn the amount of your loan balance.

To learn the current value of your home, you’ll need to do some homework.  Many homeowners look to third -party websites where approximate values are sometimes available.  Or homeowners use their current tax assessment as an approximation technique.

This is way too important to use rough numbers.  I want you to be fully informed.  As a service to our community, I will provide you with free research as to a current estimated market value of your home.  No charge.  No obligation.

Call me at (703) 861-1920. Or send me an email message at HeidiL@aclteam.com and I can help you by providing you a current market value of your home.  I am here to help you!

Next Step:  If the answer to each of these four questions is Yes, then your next step is to contact your lender. 

According to the program guidelines, the lender may agree to refinance.  It is voluntary on their part.

Call them first before you begin collecting the backup information you may be requested to submit.  However, this is what you will eventually need to submit to your lender:

CHECKLIST FOR A REFINACE REQUEST

  • Information about your mortgage from your monthly mortgage statement
  • Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources
  • Your most recent income tax return
  • Information about any second mortgage or home equity line of credit on the house
  • Account balances and minimum monthly payments due on all of your credit cards
  • Account balances and monthly payments on all your other debts such as student loans and car loans

Don’t forget … if you have questions or simply need to talk about your situation … call me at 703-861-1920.

MODIFICATION

ALL of the answers to five questions below must be yes.  Otherwise, this Federal program will not provide assistance.

  1. 1.    Is your home your primary residence?

This is an easy question!  Yes and proceed.  Or No and stop!

  1. 2.    Is the amount you owe on your first mortgage equal to or less than $729,750?

Another easy question!  Yes and proceed.  Or No and stop!

  1. 3.    Are you having trouble paying your mortgage?

The key element is a hardship.  A hardship can result from reduced hours at your job, loss of your job, unexpected or extraordinary medical bills, or even a sudden increase in your loan payments.  You will eventually have to write a hardship letter.

Right now, it is just a Yes or No response.

  1. 4.    Did you get your current loan before January 1, 2009?

Yes and proceed.  Or No and stop.

  1. 5.    Is your total payment on your first mortgage (including principal, interest, taxes, insurance, and, if applicable, homeowner’s association dues) more than 31% of your current gross income?

Use your gross monthly income BEFORE any deductions for taxes and adjustments such as health insurance.  Married couples should combine their monthly gross income.

Now divide your total loan payment by your gross monthly income.

If the result is greater than 31%, your response is Yes. 

If it is less than or equal to 31%, your response is No.

Next Step:  If the answer to each of these five questions is Yes, then your next step is to contact your lender. 

According to the program guidelines, the lender may agree to refinance your current loan.  It is voluntary on their part.  However, many lenders have made a commitment to delay foreclosure on all loans that meet the minimum eligibility criteria for a home affordable modification.

Again, call them first before you begin collecting the backup information you may be requested to submit.  However, this is what you will eventually need to submit to your lender:

CHECKLIST FOR LOAN MODIFICATION

  • Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources
  • Your most recent income tax return
  • Information about your savings and other assets
  • Information about your first mortgage from your monthly mortgage statement
  • Information about any second mortgage or home equity line of credit on the house
  • Account balances and minimum monthly payments due on all of your credit cards
  • Account balances and monthly payments on all your other debts such as student loans and car loans
  • A letter describing any circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.) if applicable

Once again … if you have questions or simply need to talk about your situation … call me at 703-861-1920.

The Federal government website is www.makinghomeaffordable.gov

If these well-intended Federal programs are unable to help, don’t despair.  Doing nothing is the least desirable strategy you might choose.

Call me.  Email me.  I can help.  I know.  I’ve helped other homeowners in the same situation.

Do something … You are not alone.

I am available to help you with your real estate questions, answer your questions about financial stress, and to lend an ear if that’s all you need! I can help during these painful times.
Heidi Ludwig

When Trust and Experience Matter

(703) 861-1920

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