Investment Mortgage Guy

On March 4, the Obama administration released an outline of what they are calling the “The Making Home Affordable Program.” There are two parts to this plan. First, if you are current on your mortgage and have good credit, stable income and your loan is currently back by Fannie Mae or Freddie Mac, you will be able refinance your mortgage (no cash out allowed) with a new mortgage at current mortgage rates without any equity in your home. (As high as 105% of the value of your home)  Secondly, if your income has recently dropped, your interest rate recently increased or you have suffered a hardship that has increased your expenses (like medical bills), you may qualify for a loan modification. In this case, your loan servicer will review your income and can lower your interest rate as low as 2% and/or lower your pricinple balance to get your payment to 31% of your current gross income. All plans are designed to help owner occupied properties only.

I really like this new outline and I believe it will encourage banks to finally standardize their processes which should really help a lot of people save their home. Right now, participation by banks in this program is not mandatory but highly encouraged unless the lender received or is going to be receiving bailout funds from the government. (Then they have to participate)

To get a complete outline of the plan, you can view the website at:  Obama’s New Mortgage Plan

If you have further questions about your personal situation, you can call us at 952-808-2820 and as we start to learn which lenders are offering what, we will be happy to let you know.

Rob Bonahoom

Mortgage Coach