The MHA Plan is focused on 2 areas, modifying loans for homeowners who can’t make their payments and offering an opportunity for homeowners who couldn’t take advantage of lower interest rates because of declining home values to refinance.
For homeowners who are in danger of losing their homes and haven’t yet taken any action, this is a good time to come forward. The Homeownership Resource Center has established procedures to ensure that all clients will be screened for eligibility. However, it should be stressed that lender participation in the MHA program is voluntary. We have heard that most of them are signing on to the program, but if some decide against it, The Homeownership Resource Center will continue to do everything we can to help clients balance their budgets and remain in their homes.
Since the March 4th announcement, our counselors have been fielding calls from homeowners about what the program means and information will be available at all of our mortgage default
clinics. The bottom line is this: Doing nothing is the worst thing you can do. If you are in trouble, call 888-320-0350, find the default clinic closest to you and go.
Criteria for the modification of a home loan (www.financialstability.gov)
- Property must be owner occupied.
- Balance must be less than $729,750.
- Loan must have been originated before 1/1/09.
- Mortgages, taxes, insurance and homeowner association dues must be more than 31% of gross income.
- A significant change in the expenses and income makes the mortgage unaffordable.
- Property must be owner occupied.
- Income of the borrower must be sufficient to support the new mortgage payment.
- The first mortgage must not exceed 105% of the current market value.
- Loan must be owned or securitized by Fannie Mae or Freddie Mac.
I think this Making Home Affordable plan is very promising, though I'm not completely convinced yet. It's only been implemented officially only lately, so I'll have to see how it turns out.
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