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Obama’s Mortgage Relief Plan: Details are out on the “Making Home Affordable” program

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MHAlogo The US Treasury today released details on the “Making Home Affordable” program announced by President Obama here in Phoenix on Feb 18.

Dubbed the “Mortgage Rescue”, “Homeowner Affordability and Stability Plan", “Homeowner Bailout” and various other names in the press, the official program name is now the “Making Home Affordable” (MHA)program.

Details are available at a new site, FinancialStability.gov. While the site says it is “coming soon” there is already a great deal of information available there.

The Home Affordable Refinance program will “be available to 4 to 5 million homeowners who have a solid payment history on an existing mortgage owned by Fannie Mae or Freddie Mac. Normally, these borrowers would be unable to refinance because their homes have lost value, pushing their current loan-to-value ratios above 80%. Under the Home Affordable Refinance program, many of them will now be eligible to refinance their loan to take advantage of today’s lower mortgage rates or to refinance an adjustable-rate mortgage into a more stable mortgage, such as a 30-year fixed rate loan.” (source: Department of Treasury MHA Summary of Guidelines)

The Home Affordable Modification program will “help up to 3 to 4 million at-risk homeowners avoid foreclosure by reducing monthly mortgage payments. Working with the banking and credit union regulators, the FHA, the VA, the USDA and the Federal Housing Finance Agency, the Treasury Department today announced program guidelines that are expected to become standard industry practice in pursuing affordable and sustainable mortgage modifications. This program will work in tandem with an expanded and improved Hope for Homeowners program.” (source: Department of Treasury MHA Summary of Guidelines)

Here are 38 Frequently Asked Questions (FAQs) on both the refinance program and the loan modification program (PDF file from FinancialStability.gov).

Here is an updated detailed program description on the Making Home Affordable Program from the US Treasury (PDF file).

There is also a page available that will guide you through some questions and actions you need to take to see if you are eligible for either of these programs. One of the primary factors in determining if you are eligible is whether you have a  Fannie Mae or Freddie Mac mortgage. Your mortgage service or lender (where you make your payments) should be able to answer this question. Also, both Fannie and Freddie have set up web pages where you can enter some info and they will let you know (as of this writing, the Freddie Mac page is not functioning (Update: Link corrected. FinancialStability.gov had it wrong. Thanks Carl!). The Fannie Mae page is functional).

I’ll have more once I’ve had some time to digest and reflect on this information.

Comments

  3. It will be interesting to see if this plan helps-it certainly sounds like it will be very beneficial, but like you I will have to spend some time looking at it in detail.

  7. Seems like this will help a lot of people that got upside down and seems like a step in the right direction. There is a lot to read over though, so I'll enjoy hearing your thoughts and comparing them to mine.

  8. Thanks Jay,

    It is my first time visit here but I'm impressed with all the detailed information you provide on the site. I'm also anxious to hear your thoughts since this topic is huge at work right now.

    So many of my friends struggle to make ends meet and to me this new plan looks promising on first looks. I had a quick browse and am certainly interested to see where this leads. If it helps people, then it is a good thing.

    Cheers

    Walt

    **Walt´s last blog post..Florida Tax Lien Information</abbr></abbr>

  11. Great post Jay – there's tons of information floating around out there; it's nice to get a well written recap.

    I like the link to the FAQs, nice addition

  12. The FAQ mentioned that there were already programs set up for owners with FHA loans. Does anyone have any information on those programs and what they do?

  13. Thank you for explaining this not so ver straightforward plan to the rest of us. I have been inundated with question from my own clients and have been researching the answers all morning… your post is timely and helpful.

    **Carmen Isais´s last blog post..Average Home Price in Davis</abbr></abbr>

  14. "Most Obamas plans and programs are only geared to help a certain class."

    I agree. I suppose there is ultimately not an easy way, or perhaps any way, to be completely fair about it, but it seems that these programs that I am, or my children, are paying for don't benefit me.

  15. Jay – thanks for the super detail on this post. I've a lot of reading to do this weekend re: the Making Home Affordable program. Seems like a great step in the right direction. I hope I still feel that way come Monday!

  16. Guess I have to read more about it. From first glance, I thought it said that if you are more than 5% upside down in your mortgage you don't qualify.

  19. I am very hopeful this will help a lot of people-though some might feel it is "unfair" or will "create class wars"(Keahi) We need to keep in mind that the government doesn't HAVE to bail anyone out and we shouldn't be annoyed at the help that does come our way.

  22. I hope this helps those in my own family who are struggling to keep their homes! We have been very concerned about how we are going to be able to help each other through these very tough times!

  24. We have an upper level summary on our page that puts together the Treasury .pdfs in one document for a detailed analysis of the plan here:

    http://www.homeaffordplan.com/makinghomeaffordabl…

    Another thing we are trying to do is update the site as details are implemented and become available.

    Some rumours that we have heard are:

    – 105% cap on Fannie and Freddie mortgages may be raised

    – qualifying borrowers must submit specific tax info and a letter of hardship

    – letter of hardship explaining a "change in circumstances or a rise in payments that will lead to foreseeable default"

    We're also constantly trying to improve our eligibility calculator here:

    http://www.homeaffordplan.com

    Please let me know if any of you find this useful as we are currently developing it to address borrower information needs.

  26. I sure hope this helps many families to keep their homes! If they lose their jobs and their homes and their credit is ruined, they may end up living in tents and the taxpayers will end up spending a lot of money supporting them with food stamps and other entitlement program monies. I'd much prefer seeing them staying in ther homes!

    **Amy´s last blog post..Drove me batty</abbr></abbr>

  27. I'm glad the help that is needed is finally getting out the door. Lets hope this is the bottom of the barrel with a quick recovery in the real estate market. To think of all of the poor familys that have already lost their homes.

  28. Took some research but try these websites. Together they seem to cover it all.

    If your loan is held by Freddie or Fannie, you might qualify for a refi or loan mod.

    First, find out if your loan is held by Fannie or Freddie. Contact them here to find out. They give you the phone number to call Fannie and Freddie directly to see if your loan is held by one:
    http://www.financialstability.gov.

    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

  30. Thanks to Jay and everyone else for all the great links on the MHA bill-I'm still going through it all and trying to digest how this might help. I really am hopeful it will help a lot of people.

  31. I'm no super sold on this whole plan, but upon reading on various articles and opinions about it, I think it may just work. I'm curious to know how it will turn out, but I hope it will work for all the millions of people who need help with their homes.

    **Imee´s last blog post..Housing Bailout Plan to Help Homeowners</abbr></abbr>

  32. I am in agreeance with that. I am not 100% sold on it yet. Lets let the results speak for themselves when all said and done. I hope this works and hope that I can benefit from it as well as all the other homeowners that are hurting.

    **Brewer Caldwell´s last blog post..Brewer Caldwell is the BEST</abbr></abbr>

  34. This plan is tiny. $75 billion is a tiny, tiny compared to the size of the housing mortgage market. The refinance part will not help much. You can get refinancing out side the 20% rule now. It is very easy. You just have to make PMI payments.

    Regards, Shane, Guy into real estate in panama

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