Monday, March 09, 2009
Last week, Obama officially released the final details of his $75 billion foreclosure relief plan. I have outlined a quick summary of the major points of the plan and how homeowners can find out if they are eligible to either modify or refinance their existing loan. There are two portions to the plan. One portion allows non-delinquent homeowners who have underwater mortgages to refinance at a lower rate and the second portion allows delinquent homeowners to get a loan modification. Here is a quick summary of the major points:
Part One: Refinance Guidelines:
You must be current on your mortgage payments, meaning you have not had late payments in the last 12 months.
The home being refinanced must be your primary residence.
The loan must be secured by Fannie Mae or Freddie Mac. You can find out if your loan is owned by these institutions by calling 1-800-7FANNIE, or 1-800-FREDDIE. You can also find out online at http://www.fanniemae.com/homeaffordable or http://www.fanniemae.com/homeaffordable
You are no more than 5% underwater or put another way - the amount you owe on your first mortgage cannot be more than 105% of the value of your home.
You have a stable income to qualify for a new mortgage.
All loans that are refinanced will be refinanced into 15 or 30 year fixed rate loans. The interest rate would be based on the market rate on the day of closing. The loans also would not have any prepayment penalties or be a balloon note. Borrower will be responsible for fees associated with the refinance.
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