Find Out If You Qualify For Mortgage Assistance
The Obama Administration announced new details about its massive foreclosure relief program — and the Washington Post says that it includes a refinancing program for homeowners with little equity in their homes, but who otherwise would be able to refinance. The Post has a quick interactive tool that will help you to determine whether or not you qualify for the program.
A separate part of the Homeowner Affordability and Stability Plan is aimed at the growing number of homeowners who have been unable to refinance because they have little equity in their home. Only homeowners whose mortgages are owned or financed by Fannie Mae and Freddie Mac, the mortgage financing companies recently taken over by the government, can qualify for this part of the program. They would have until June 2010 to refinance.
To find out whether or not you qualify for this program, or the loan modification program that is aimed at homeowners in danger of foreclosure, click here.
Treasury Dept. Details Foreclosure Prevention [WaPo]
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Comments:
LOL, if you are behind on you mortgage you do not qualify. This is only going to help those that can pay their current mortgages. Thus it's pointless.
Oh my, you can be underwater by a whopping 5 percent! For people who bought a house before this collapse with little down, 5 percent is nothing.
Um... looking at the questionnaire, the first one asks if you are a homeowner or a renter. Just out of curiosity I clicked renter to be told I don't qualify (I am a homeowner but am not having trouble making my mortgage payments).
How dumb to they have to make it though, wouldn't renters know this doesn't apply to them?
Man this is so lame.
But it's a voluntary program and you are refinanced into current market rates.
It's wild that the government can shovel billions into banks, yet can't seem to compel banks into specific actions.
Frankly, the government should simply take a couple banks it now owns (because the bailout money is equal or greater than the bank's net worth) and loan money at 4% interest.
Other banks would have to match the rate or have no new lending.
And no further bailout money is disbursed to banks. It is used to fund these lower-interest mortgages.
4% mortages mean millions more people will be able to legitimately afford homes. Home buying will not only stem the housing crisis, it is a huge boon the our overall economy.
Housing buyers buy carpeting and hire contractors and buy paint and appliances and furniture and....and.....etc.
Why wouldn't this end the housing crisis within months?
@wgrune: If you are in the areas most affected by the collapse, yes. But the majority of the country is not.
@SkokieGuy:
>Why wouldn't this end the housing crisis within months?
Because your plan, while reasonable and well thought out, does little to line the coffers of our banking overlords, the true holders of the power.
I don't need help. You see, I was one of those people who lived within their means and lived in an apartment in order to save money. Now I get to help out those who bought homes they couldn't afford...awesome.
@concordia: Troll much?
Let's see, you as a renter, will now be able to get a great deal on a home, since values are down AND the government will give you $8,000 to buy the home, up to 10% of the purchase price - as a gift, you don't repay.
When I bought my house, that the gub'ment didn't give me one dime to buy, and I paid a lot more what I would have paid today.
So SHUT THE FUCK UP and buy a house already.
huh, i should have bought a lot more house, i guess, rather than putting down 20% on a loan that's payment is only 14% of my gross income... oh well, live and learn
@concordia: But when that happens, it makes all surrounding houses fall in value, putting more and more people "underwater." This plan is geared more toward helping those people.
As much as I hate that it's come to this, I think it is, ultimately, a step in the right direction.
Here's a couple of ideas that I think would help this whole housing situation...
ARM loans must have an interest rate cap. The possible interest rate must be fully disclosed. As in, the borrower must sign a piece of paper that says "Your interest rate will vary between 8%-15%. At 8% your monthly payment is $X and at 15% your monthly payment is $X."
Banks must verify a borrower's income that they are using to determine if the borrower is "eligible" for the amount of the loan. They must qualify the borrower for the maximum payment amount if the loan is an ARM.
The second rule should be retroactive. If a loan does not have proper paperwork showing that the bank verified the borrower's income, then they should be required to rework the terms of the loan, even if the borrower no longer qualifies. Basically, the bank "qualified" someone for an ARM at 8%, but then the payments increased because now they are charging 12% interest and the borrower can no longer afford the payment. The bank must refinance the loan at a fixed rate of 8% and forgive any late fees. I'm sure there would need to be a lot more specifications, but something along those lines would probably help out a lot of people that got screwed over.
@concordia: Abrasively put, but the message is entirely right. People like you and I get screwed subsidizing the mortgages of our neighbors who unintelligently bought when they never could afford to and now they're foreclosing.
As for house values, that's irrelevant and not even something that we should want. Markets were overvalued and ballooned, we want them to readjust, not keep them sustainable stilted. This will only serve to extend the problem and not solve it. But, c'est la vie, the government knows how to spend my money better than I do.
@Corporate_guy: I don't know if I would call it pointless. I'm not behind on mine, but it looks like I might qualify for the Loan Modification Program. That sure would help me out if it can save me a few bucks.
I must say this plan sucks. 'Is your mortgage serviced by FM/FM?'
Umm, no. Sorry, you do not qualify.
What good is that?
@nataku83:
Check to see if you still have 20% equity in your home. If the value has dropped, you might not. This is exactly the kind of problem people are having--where they would like to be able to refinance at a lower rate to cut the monthly payments, but can't because their home value dropped.
@George Gdovin: Yes, it's good for you. But it's not actually helping those that absolutely need help. Those people are screwed.
@SkokieGuy:
Part of what got people in this mess is the fact that money was cheap to get (low interest rates).
Houses still not at a level where they are affordable. Take for instance Maryland:
Census data for median household income: $68k
Median prices for houses in the Baltimore region (today): $265k
Assuming that you do not want a mortgage that exceeds 31% of your income (ignoring taxes & insurance), that family could afford a house that is in the $200k range.
A 30 year loan for $160k (20% down) would be around 860/month. Figure around 2.5-3k in taxes/insurance, and your monthly payment is about $1100/month.
Lending at 4% at the current price of 265k puts their payment at around $1350/month.
Of course this assumes they have 40k to plop down on the place to begin with (in both cases).
Its a bitter pill - this refinancing bailout wont be for everyone - just those that still would have a chance to pay their mortgages if their interest drops by 2 points - those that are too far under, or just completely out of their league are beyond helping.
The market will only recover once the prices drop some more, and people can start buying houses again not because interest rates are below 5%, but because they can afford to.
We refinanced recently to take advantage of a super low fixed rate product (we were in a good fixed rate loan, our new one is 2% lower). We sweated the appraisal which was in-depth (our home is historic - so hard to value and in South Florida, we bought in 2004, the house next door [also historic, but smaller and not as nice] to us sold the next year for $100,000+ more than we paid) and the appraisal came back $3000 more than we paid in 2004 - yay we made $3000. So we were happy and then the bank told us they only loan 70% of the value for the loan product (super great rate, fixed) in Florida because we are a declining market. Luckily we have an emergency fund and we could afford to pay down our loan by about $3000 to bring the mortgage to the 70% value.
@concordia: Well stated, sir. Those of us who have behaved responsibly are getting the most shaft, sans lube. I bought my house a few years ago before the boom at 144. I can afford my payments. Now because of irresponsible lenders, buyers, and brokers, my house is worth 105 according to recent comps. >5% underwater = I don't qualify.
@SkokieGuy:
Because it's not just a housing crisis. In fact, at this point I'd say housing is no longer the biggest problem.
It's a crisis caused by a lack of credit and a lack of confidence.
I think you're all missing the point of this plan. It's not to help everyone with a mortgage. Lots of people with unaffordable loans are beyond help. Lots of others (say speculators) shouldn't be helped, and they aren't going to be. This plan is something of a floor for people at risk of having the bottom fall completely from beneath them. To the extent that those 8 - 9 million people can be helped the communities they live in will be better off. I guarantee that the cost of foreclosure to a community is higher than the cost of temporarily augmenting a few home loans.
At most this is only going to buy people some time to get their finances in order, as this program will only last a few years.
The government could do what you suggest and formally nationalize the banks they hold a stake in, and force those banks to provide 4% loans. But that flies in the face of the "free" market. Doing so would destroy what little remaining confidence there is. And as ironic as it is to say in the current climate, the government is never going to be the best entity to assess risk when it comes to making loans on a personal level. On a macroeconomic level yes, but on a personal level it should be left to dedicated institutions with a history of doing this sort of thing. Some people would say that part of the reason we're in this mess is because of prior government meddling in the loan process.
@cabjf:
My area isn't hard hit at all and the value of my house is down 20%. I owe $50,000 more than my house is currently worth.
All that I ask is that if any of you are looking at this please consult a lawyer. I know it is expensive but we are talking about hundreds of thousands of dollars in real estate. I believe that if more people had consulted a lawyer we would not have been in this ARM mess.
@cabjf:
I bought my house two years ago in MN (relatively low foreclosure rates, etc) and my house is allready worth about 6% less than what I owe on my mortgage.
@DanR2: Well, I've been paying above the minimum, have a 15-yr FM mortgage, and Zillow claims my house has only lost 0.7% of it's value in the last year (I doubt that's particularly accurate, but my area has not had much depreciation since real estate was dirt cheap going into this crisis), so I'm pretty sure I still have at least 20% equity. Zillow's claim would result in 23% equity.
protip: if you're reading this website, you do not qualify for mortgage assistance.
@Paladin_11: Note: Bailing out banks and savings and loans and automakers flies in the face of the free market. We don't have a free market when profits are privatized and risks are publicly subsidized.
Some people would say we're in this because of government meddling in the loan process and I'd say it's because of reducing regulations under intense pressure from the banking and financial industries. And yes, both Dems & Reps have had a hand in allowing this toxic debt to be created.
The current plan only helps those in homes in trouble, and potentially may simply stave off foreclosure or bankruptcy for a few years. They are not likely to have their financial situation improved enough to start remodeling, furnishing or engaging in the kinds of activites that will boost the economy and save jobs.
This does nothing to help communities with huge amounts of vacant already foreclosed homes.
True low interest freely available credit, (responsbily lended) will bring lots of NEW buyers into the mix. You'll see renters who can now afford to buy and investors who will buy and rent.
Property values will stop declining when the vast inventory of vacant homes stops increasing and there is significant buying activity.
NEW buyers are more likely to engage in the kind of spending typically associated with homebuying, like shopping at home center stores, buying furnishings, employing tradespeople.
Employed people can afford to buy things, which further helps the economy.
Rinse, lather, and....
@pb5000: How dumb to they have to make it though, wouldn't renters know this doesn't apply to them?
Did you not see the article wherein a McDonalds patron phoned 911 at least 3 times due to a lack of McNuggets?
@1stMarDiv: I don't need help either, but that doesn't mean I'm not going to phone up my lender and ask them to reduce my fixed-for-30-year interest rate.
Well good for them, but where's my piece of the pie as a renter who didn't buy because I knew a home was too much money? I'd love some help to keep a roof over my head.
@Corporate_guy: uh this is just one part of the plan. The majority of it does deal with those who fell behind, which is the part most people who pay on time have issues with.
None of this mortgage bailout nonsense will work. Just wasting more taxpayer money. Nobody is allowed to fail in our country anymore. No matter how much money is thrown at the mortgage situation, prices are going down. Just remember this continued do-goody policy in a few years when the economy will still be in ruins.
@howie_in_az:
Did you not see the article wherein a McDonalds patron phoned 911 at least 3 times due to a lack of McNuggets?
LOL, now we know who's gonna get our tax dollars!
@t-r0y: Correctly quoting your source is one step towards that coveted star. You'll be there one day.
I love (NOT) all the "I'm smart/prudent; you're stupid/spendthrift" self-righteous responses to this post. Yes... it's really all about YOU. Just buy a cheap house at a great rate while you can, smarty-pantses, and cut the smug posturing. *sheesh*
Meanwhile, back to the actual post that gives useful CONSUMER information, thank you very much.
What part of this program is aimed at foreclosure prevention? It doesn't help anyone who is behind on mortgage payments are underwater by more than 5 percent. Is the target audience really that much of a risk?
And, please tell me the Loan Modification program has more options than simply extending a fixed-rate mortgage to 40 years. Really?
@concordia:
"Everybody is getting on my nerves!
Everybody is much stupider than me!
Why don't you do things
The way that I want?
I am right and you are wrong. ME!"
"Me" from Almost Live - the official anthem of Objectivism.
@concordia: So if a military family bought a house last year with a payment they *could* afford, saw their house lose $50k in equity, putting them far underwater and then be told by the army that they need to move cross country, your answer is "fuck you"?
@samurailynn: All interest rates should be capped. If a bank can't make a profit without jacking up rates to ridiculous values, then it shouldn't be making the loan.
@TEW: You are very right. People were entirely too flipant in a lot of cases about the biggest purchase they will make in their life. I spent about 2 monthes researching when I bought my flat screen. I can't imagine people just signing on the dotted line for 40 or so pages without getting a professional involved.
@SkokieGuy: So where exactly is this $8,000 "gift" that you don't have to pay back? I've heard of getting a no interest loan that you have to pay back over 15 years, but no gift that I'm aware of.
@Pro8678: It was a $7,500 tax credit that was paid back (interest free) over 15 years, but it has changed to a $8,000 credit that you do not pay back if you live in the home at least three years.
f Y?