- Image by Rev Dan Catt via Flickr
Derek Overbey of Roost.com posted a nice compilation of the highlights of President Obama’s Home Affordable Modification Program on his blog today. The entire 17 page document can be found here if you wish to read it in its entirety.
Basically, if you want to take advantage of this program, you must live in the home, the mortgage must have been originated prior to January 1, 2009 and you must apply by December 31, 2012. The home cannot be investor owned or condemned; there is no minimum or maximum LTV (loan to value) ratio necessary to qualify, and the property valuation must not be more than 60 days old. The unpaid balance on the first lien must be $729,750 or less (for a single family home; higher limits apply to multiple units), and borrowers in bankruptcy proceedings are not automatically disqualified from receiving a modification. Lastly, loans may only be modified once.
So, that was the Cliff Notes version of the program guidelines. If you feel you are eligible for the program we urge you to go read the entire document here to familiarize yourself with the guidelines and contact your lender for more information or to initiate your application for modification.
UPDATE: You can check here to see if you qualify for this program!
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{ 17 comments… read them below or add one }
I called my bank today and they still have not received any information or guidelines on this program. How long will it take?
Your bank should already have information on this program to pass on to their customers. If they don’t, I’m not sure what they’re waiting for! You can click the link in the post to go to a site and see if you’re eligible for the program, and there’s another link that goes to the complete list of guidelines for the program. And I’d keep hounding your banker, too! There’s no excuse why they shouldn’t be able to provide you with this info. Good luck!
Must the servicer opt into the Affordability Program inorder to get? I heard that if they opt in, they must approve eligible applicants, whether they like it or not. True?
Dick, the program is voluntary for lenders, but there are financial incentives available to them that make it probable that all major lending institutions will participate. There is a provision in the guidelines that says servicers must “enter into the program agreements” with the Treasury’s financial agent prior to receiving any pay-for-performance payments. As servicers sign these agreements, a list of them will be posted at FinancialStability.gov. The guidelines also state that servicers must screen every potential applicant to ascertain if the applicant “has had a change in circumstances that causes financial hardship, or is facing a recent or imminent increase in the payment that is likely to create a financial hardship”. While it is true that if you meet the eligibility criteria for the program you can apply, your servicer will still have to review your situation to determine if your loan is eligible for modification. There are several tests that are applied to the loan and the results of those tests will determine what kind of modification the loan can receive. At least this is how I have interpreted the guidelines, but I am NOT a mortgage lender so my analysis may be in error. I urge you to speak to someone at your bank or mortgage company to get the straight dope on this program.
I called again and they act clueless. The office at HUD said not so and to call FTC or State Attorney General if they don’t comply. Here’s the Freddie Mac link that gives the servicer all they need to know and it says they can immediately begin modification.
http://www.freddiemac.com/singlefamily/service/mha_modification.html
Well, as I told Dick, the program is NOT mandatory, it’s voluntary for lenders to participate, but with all the financial incentives in it I can’t for the life of me think of a reason why a bank or lender wouldn’t want to participate. I hope your bank isn’t one of the major ones, e.g. BoA or Wells Fargo. If it’s a small, regional bank, maybe they don’t want to participate, but that would be foolish on their part. I would show your banker the link to the Freddie Mac site you gave here and ask when they expect to sign on board. If they say they’re not going to, ask WHY NOT. And then I would be looking for someplace else to refi my loan, if you can. This program was supposedly put in place to HELP homeowners, not keep them in the dark. Don’t let them control you, do what you need to do to get the answers and info you need. Good luck!
Thanks. It’s Flagstar Bank and they received 543 million the first TARP. They also said I’m under F/Mac/F/Mae. I will update you when I call them again. They suggested a short sale last Feb, the dopes. Why not keep me with a little lower payment? Are they still a dollar sock?
i was wrong. They’re .76. yikes.
Does anyone know what will happen to credit scores if you file for HAM? I’m still current on my payments but just lost my job. Making the huge payment next month will be tough.
The Harriman team “I hope your bank isn’t one of the major ones, e.g. BoA or Wells Fargo. ”
Unfournately I bank with Wells Fargo for my mortage!!! Just curious to why the major ones like “WELLS FARGO” wouldnt participate???
Wow, I hope you don’t have any of their stock!
Angela, most of the lenders I have talked to don’t think applying for the modification will negatively impact credit scores, since this program will most likely be used by people who scores have already taken a hit, but but no one is really sure. I have posed the question to some other financial gurus as well and I’ll update here if I get a different answer.
Raven, that was my point: the Big Boys like BoA and Wells Fargo should absolutely be participating, but as I mentioned in an earlier comment, the program is voluntary so no one HAS to participate. I think that any servicer who doesn’t participate is crazy though, especially if they was to keep customers and partake of the financial incentives that they’ll get for offering the program. That goes double for banks that have received TARP money. Still, I would ask your bank directly if they’re participating, just to be sure.
After much research I’ve found the following websites cover everything about the “Making-Home-Affordable” program and mortgage information in general. If your loan is held by Freddie or Fannie, you might qualify for a refi or loan mod.
For an idea whether you even qualify, even if your loan is held by Fannie or Freddie, you can calculate your eligibility here:
http://www.making-home-affordable.com
I’d also call HUD. I don’t have their number but you go to:
http://www.hud.gov
And last but not least is MortgageBreakDown, in my opinion one of the best new mortgage sites for independant information available. Easy to read, navigate and contains solid information:
http://www.mortgagebreakdown
Thanks for the info, Johnny. Your link to http://www.make-home-affordable.com is broken; I think the right link is http://www.makinghomeaffordable.gov. Also, the number to HUD is (202) 708-1112; they have several toll-free numbers for different subjects, but I could not find one for the loan mod program. The Mortgage Breakdown site is very easy to read and understand, thanks for sharing!
i refinanced last year and have a texas a6 loan and it has only been 6mos. can i refi again now with the making home affordable program?
Deanna, as I understand the Making Home Affordable program, you would be eligible to refinance if the amount of your first loan does not exceed 105% of the value of your house. Your eligibility will depend, in part, on the agreement by the lender that your second mortgage remain in second position, and on your ability to meet the payment terms of the first loan. You should definitely consult your lender to verify if you are indeed eligible for the Making Home Affordable program.
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