The last few days I’ve been hearing an awful lot about the Government’s new “Making Home Affordable” program, which has been set up to help people refinance existing mortgages, or do a loan modification to help them to stay in their house. The government’s website explains what the program is meant to do:
Making Home Affordable is a plan to stabilize our housing market and help up to 7 to 9 million Americans reduce their monthly mortgage payments to more affordable levels.
The Home Affordable Refinance Program gives up to 4 to 5 million homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments. The Home Affordable Modification Program commits $75 billion to keep up to 3 to 4 million Americans in their homes by preventing avoidable foreclosures.
Some of my friends have already started the process of refinancing their home through this program, when just a few months ago they were unable to refinance because their loan to value ratio on their house was below 80/20. Apparently under this plan doing those types of refinances, even up to 105% of the value of the home, should be possible.
Eligibility For Making Home Affordable Refinance and Loan Modification Program
Of primary importance in determining whether or not you are eligible for doing a refinance under this program, is who backs your particular loan. For purposes of this program only Fannie Mae and Freddie Mac backed loans are eligible for The Making Home Affordable Refinance Plan. Fannie Mae and Freddie Mac use different sets of refinancing rules, so before proceeding any further, you’ll need to figure out if your loan is backed by either.
Who Backs Your Loan?
To find out if your loan is backed by Fannie Mae or Freddie Mac, check these websites:
- Fannie Mae’s Mortgage Lookup Form: Fannie has a larger market share, so check here first. This one won’t ask for a social security number. You can also call: 1-800-7FANNIE (8am to 8pm EST).
- Freddie Mac Mortgage Lookup Form: If Fannie Mae isn’t showing your loan on their books, try out Freddie Mac to see if they back your loan. Requires SSN. You can also call: 1-800-FREDDIE (8am to 8pm EST)
Once you’ve figured out if your loan is owned by Fannie or Freddie, write it down on your mortgage statement. Next, it’s time to figure out if you’re eligible for the refinance or loan modification programs.
Are You Eligible For The Government Program?
To be eligible for the refinance you must meet these criteria:
- Loans originated on or before January 1, 2009.
- Your loan is is owned/backed by Fannie Mae or Freddie Mac (You figured this out in step one above)
- You are current on your mortgage payments, no 30 day deliquencies in the past 12 months.
- You have income to support the new mortgage payments.
- Your first mortgage will not exceed 105% of the current market value of the property.
To be eligible for the loan modification you must meet these criteria:
- Your loan must have been obtained on or before January 1, 2009.
- First-lien loans on owner-occupied properties with an unpaid principle balance up to $729,750
- Document income with signed IRS 4506-T, two most recent pay stubs, and most recent tax return.
- Sign an affidavit of financial hardship.
- Modify by December 31, 2012.
- Have a mortgage payment that is no longer affordable, examples include significant change in income or expenses.
- The mortgage loan is in danger of going into default or loan is currently in foreclusure.
- Your loan does not necessarily have to be backed by Freddie Mac or Fannie Mae
- Only the first mortgage is eligible for a modification if you have a second. (UPDATE: Second mortgage may now be eligible. Check here)
Again, to figure out if you are eligible for the Making Home Affordable program, go to the government’s website and answer their simple questionnaire. If you meet the criteria above, you should reach a page at the end of the process telling you that yes, you are eligible. Try it out at the link below:
The Next Step – Refinancing Or Modifying Your Loan
Now that you’ve determined that your loan is backed by Fannie or Freddie, and you’ve confirmed that you meet the eligibility requirements, what’s the next step?
First, you should get all of the following paperwork together so that when you call your loan servicer and ask about your options under the Making Home Affordable program, you’ll be ready to go. You’ll need:
- Information about monthly gross income, including recent pay stubs if the borrowers are salaried and receive them and documentation of any income received from other sources.
- Most recent income tax return.
- Information about assets.
- Information about any second mortgage on the house.
- Account balances and minimum monthly payments due on all credit cards.
- Account balances and monthly payments on all other debts such as student loans and car loans.
Finally, you should call your mortgage servicer or lender and ask about the Home Affordable Refinance or Loan Modification application process, and what your options are under the program. Their phone number should be on your monthly mortgage bill or coupon book. Once you enter the process, be patient as lenders are receiving a lot of applications, and it may take some time to get things moving.
For more details about the refinance and loan mod programs, check out these FAQs
- Making Home Affordable Refinance Program Frequently Asked Questions
- Making Home Affordable Loan Modification Program Frequently Asked Questions
- Update: Modification Program Updated To Cover Second Mortgages
Are you currently trying to refinance or modify your home loan under the Making Home Affordable program? What has your experience been like so far? Any tips or pointers to make it easier for others? Tell us about it in the comments!
Related Articles From Bible Money Matters- New Details About Making Home Affordable Program And Second Mortgage Modifications
- Dave Ramsey’s 7 Baby Steps: Step 6 - Pay Off The Home Early!
- Considering Refinancing Or Getting A New Home Loan? Here's How To Read That Confusing HUD-1 Settlement Statement
- My Experience With The Making Home Affordable Refinance Program: Part 1
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Well my loan is with chase in California. I have a second on it as well.
They just told me that they aprpoved on the first and denied on the second due to house ratio. Five months ago I was given the opportunity. To make trial payments on both once I re-submitted my updated paystubs they said I made too much. Although I explained that it was overtime hours. U will be in the same boat if the second I’d not modified. They suggested to contact the work out department but I don’t trust them anymore. Any suggestions. Please help..
We were told we could refinance and everything was okay and then we were told that no we did not qualify because we have lender paid pmi. Well the more i read on this the more i see that you cannot get this program if you have pmi on your current loan, however if you owe between 80-105% on your current loan as you need to qualify then how can you not have pmi?? It seems that they contradict each other and it is impossible to get. Something needs to be done!!
I have a question,,,I heard that if your mortgage has been sold, which mine has 3 times since I got it,,,that if the current company doesn’t have your original loan papers then you can sue them and get your house for free? Because you really don’t have an agreement with them!??? Is this true? Like mine is thru Citi now but my original loan was with Bank One.
And I have another comment,,,we have been approved for a home affordable mod,,even though we DO have PMI,,,our mortgage is with Citi,,and we were never told anything about not getting it becuz of pmi,,,if your lender won’t give it to you just keep on them about it,,that’s what i did,,i kept telling them we wanted to keep our house but we couldn’t afford the payment and FINALLY they are helping us,,,the main thing is,,answer every phone call, dont’ avoid them and stand your ground with what you want,,,they dont’ need anymore foreclosures,,they will eventually help you.
It would be really great if someone could bring to light the truth about
the Making Home Affordable Programs !!!!
Making Home Affordable is one of the biggest government run scams ever foisted on the American People.
Making Home Affordable is the proverbial throwing the bone to the dogs.
There’s no meat on it. It is simply put there to distract and keep
people busy and quiet while they chew on the bone and chase their tail.
Since it has no meat the people will still loose their homes with this farce of a program.
I am speaking from experience we have and still are going round the mill with this one. Actually, we are chasing our tails.
After 6 months we have had three denials from Wells Fargo even though we totally qualify according to the program as written. We have 50% equity in our home and current on payments. Of course Wells Fargo says we don’t qulify, they won’t explain why we don’t, they just say we don’t. Again reading the program the banks call the shots in the long run, from what I can read they are the over site for the program!
The lobbyist keep growing for the lenders even though if I recall our
elected President was going to clean that up, and he was not going
employ any of them in his term. Interesting how all the ones in charge
of all these matters come directly from the financial institutions that
have been bailed out (maybe he lied?).
Some blogs and sites suggest getting a lawyer. Why do I need a lawyer to get what is suppose to be mine from my government!
Personally that money is extremely hard to come by. Our next tail
chasing session will be trying HUD/FHA. I expect that will be exactly
like the experience with Wells Fargo since it seems very apparent that this is all set up to benefit the banks, not us anyway.
In the long run I expect we will loose our home, empty out our IRA’s in
the process, our savings are already gone, and Wells Fargo will be happy as pie that they get to make even more money from our home, which we have been so faithful in paying every month. Of course we have kept it in very nice shape for them also. Wells Fargo can then resell it and they can make even more money on it. Who cares that our family is out of home, savings, retirement and well being.
And wow, what a deal I get to pay for that too.
Oh yeah, we contacted our elected officials their reply, contact your
lender and work with them. They were so helpful!
And so here we stand still chewing on the bone.
Someone telling the truth on this would be great for the American people who are getting caught up in this huge lie foisted upon them by the Obama administration offering the American people hope and help but in reality it’s just a bone.
I am having problems with this modification/refinance myself. We are down to one income. I called my bank (Bank of America) in September because I knew that we would not be able to make the October payment. They told me that there was nothing they could do because I was not yet behind. I thought the program was designed to help you if you anticipate getting behind. Everything states “don’t wait, contact your lender today.” After getting behind on the mortgage, which I told them I would, I called. But because werefinanced in July, I am not eligible for the modification. We have been in our home 12 years. In those 12 years, we only got behind shortly following Hurricane Katrina because my husband was out of work. We are now getting behind on everything. We do not want to lose our home. I thought we could at least depend on this new plan to “help” american people keep their homes and that would be one less thing we have to worry about. What a joke. So much for that.
I have a Fannie Mae backed loan through IndyMac (OneWest Bank). We have never been late on our payments, both with high credit score, etc… I have been calling them for two months now and keep getting the same answer that they don’t have the program in place to start taking application and that it should be up and running in a week or two.
Have you heard anything like this related to IndyMac/OneWest Bank? If I keep getting the run around, who would I make a complaint to?
Who can I call about Bank of America givingme the run around about the Modification program which I quailify for. The first lady I spoke to at BOA was nice and told me I quailifed and she was going to put me through to someone that could help get the ball rolling, I was put on the line with a jerk who told me there was noting they could do for me and he would put in for my case to be reviewed and I would hear back in 120 days and in the mean time I needed to keep making my payments. He also said we didn’t make enough money for any of the programs offered and that we couldn’t afford our home. What can I do?
Amanda, I just emailed you the contact info for a gentleman at BoA that helped me.