On March 4, 2009, the Obama Administration released detailed
guidelines for homeowners to help them determine if they qualify for the
Administration’s new Making Home Affordable plan. This is a follow up
to the Administration’s announcement on February 18 outlining their plan to
stem the current tide of foreclosures and stabilize the nation’s housing
The plan has two primary goals:
1.To help homeowners in existing Fannie Mae or Freddie Mac
loans that are current on their mortgage payments to refinance and take
advantage of today’s lower interest rates. Many of these homeowners
are unable to refinance because of lost appreciation in their homes due to
the continuing decline in home prices. These homeowners still have
equity in their home, just not the necessary 20% to get a refinance.
Under the Administration’s plan, Fannie and Freddie will be allowed to
refinance qualified homeowners up to a 105 percent loan-to-value of the
current value of the home.
2. To help homeowners who are at risk of
foreclosure.The Administration is offering loan servicers and investors
government assistance to help offset the cost of modifying qualified
homeowners into affordable mortgages that will allow them to keep their
homes. This may be done by reducing the mortgage interest rate,
extending the term of the loan, principal forbearance, and/or principal
cramdown. This program is voluntary and the servicers must agree to
contracts with the Treasury to participate.
In addition, the Government warns homeowners to beware of
foreclosure rescue scams:
- There should never be a fee charged for information or assistance
regarding the Making Home Affordable Program.
- Beware of anyone who says they can "save" your home if you sign or
transfer over the deed to your home. Do not sign over the deed to your
property to any organization or individual unless you are working directly
with your mortgage company to forgive your debt.
- Never make your mortgage payment to anyone other than your mortgage
company without their approval.
To find out if you qualify for either the Making Home Affordable
Refinancing Program or the Loan Modification Program please click on the