How to get in on Obama’s Mortgage Relief program

Some thought it wouldn’t happen, but as promised details of the “Making Home Affordable” program were released today.

No doubt lenders have been overloaded with queries regarding the program. Before you call your lender you can do a little homework to see if you qualify. First visit FinancialStability.gov and take the self-assessment test to see if you qualify. Remember, you DO NOT need to be behind in your mortgage payments or facing foreclosure to qualify. AND you can also qualify even if you have a 2nd mortgage, which prior to this program was a refi-disqualifier for many homeowners.

The FinancialStability site poses just 4 questions to see if you qualify for a refinance. If you answer “yes” to all four you do qualify.

And the questions are….
  1. Is your home your primary residence?
  2. Do you have a Fannie Mae or Freddie Mac loan? If you don’t know contact:
    Fannie Mae,
    1-800-7FANNIE (8am to 8pm EST).
    www.fanniemae.com/homeaffordable
    Freddie Mac
    1-800-FREDDIE (8am to 8pm EST)
    www.freddiemac.com/avoidforeclosure/
  3. Are you current on your mortgage payments?
    “Current” means that you haven’t been more than 30-days late on your mortgage payment in the last 12 months.
  4. Do you believe that the amount you owe on your first mortgage is about the same or less than the current value of your house?

If you answered “no”, you may still qualify for a loan modification. For this you must answer “yes” to all of the following:

  1. Is your home your primary residence?
  2. Is the amount you owe on your first mortgage equal to or less than $729,750?
  3. Are you having trouble paying your mortgage? For example, have you had a significant increase in your mortgage payment OR reduction in your income since you got your current loan OR have you suffered a hardship that has increased your expenses (like medical bills)?
  4. Did you get your current mortgage before January 1, 2009?

If you do qualify you’ll need to gather some documentation before calling your lender:

  1. Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources.
  2. Your most recent income tax return.
  3. Information about your assets
  4. Information about any second mortgage on the house.
  5. Account balances and minimum monthly payments due on all of your credit cards.
  6. Account balances and monthly payments on all your other debts such as student loans and car loans.
  7. A letter describing the circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.).

Naturally, I suggest you have some patience when dealing with your lender. They also just received the details of the program. Not only will they need to get through the paperwork, they’ll also have to deal with an estimated 9 million homeowners who will qualify for the program. Still I know you might be anxious to get with the savings. Note that applications will be accepted through Dec. 31, 2012, which is handy if your situation changes.

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