Making Home Affordable will offer assistance to as many as 7 to 9 million homeowners, making their mortgages more affordable and helping to prevent the destructive impact of foreclosures on families, communities and the national economy.
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The Obama Mortgage: Making Home Affordable, Once Again

You may qualify for the new $75 billion mortgage loan modification program signed by President Obama signed into law.

According to the official government Web site, Making Home Affordable will offer assistance to as many as 7 to 9 million homeowners, making their mortgages more affordable and helping to prevent the destructive impact of foreclosures on families, communities and the national economy.

The Obama administration's new initiative, called Making Home Affordable and also referred to as the Obama Mortgage, is comprised of two separate programs: Home Affordable Refinance and Home Affordable Modification.


The Home Affordable Refinance program will be available to 4 million to 5 million homeowners who have a solid payment history on an existing mortgage owned by Fannie Mae or Freddie Mac. Normally, these borrowers would be unable to refinance because their homes have lost value, pushing their current loan-to-value ratios above 80 percent.

The objective of Home Affordable Refinance is to provide creditworthy borrowers who have shown a commitment to paying their mortgage the opportunity to get into a mortgage with payments that are affordable today, and sustainable for the life of the loan.

Under the Home Affordable Refinance program, many people will now be able to refinance and take advantage of today's lower mortgage rates, or refinance their adjustable-rate mortgages into more stable mortgage products such as the 30-year fixed rate loan. Owners can refinance up to 105 percent of the new value of the home.

While many people will see a reduction in their mortgage payments with Home Affordable Refinance, some who were paying interest-only mortgage loans, or had a low introductory rate scheduled to increase in the future, may not see their current payment decrease. However, even those people could still save a great deal over the life of the loan by applying for the Home Affordable Refinance, by avoiding future mortgage payment increases.


To qualify for Home Affordable Refinance:

  • The loan on your property is owned or secured by Fannie Mae or Freddie Mac.

  • You must be are current on your mortgage payments (no more than 30 days late in the last 12 months).

  • The amount you owe on your first mortgage is the same or slightly less than the current value of your house.

  • You have sufficient income to support the new mortgage payments.
When you're exploring Home Affordable Refinance, be prepared to ask these questions: What are the interest rates? What are the closing costs? What type of mortgage product is the lender offering? Call several lenders and compare offers.

Refinancing will not reduce the amount you owe on the loan; the objective of Home Affordable Refinance is to help borrowers get into more affordable loans. Refinancing will also not reduce the principal amount you owe. However, Home Affordable Refinance should save you money by reducing the amount of interest that you pay over the life of the loan.


The Home Affordable Modification Program will help up to 3 million to 4 million at-risk homeowners avoid foreclosure by reducing monthly mortgage payments to no more than 31 percent of the borrower's gross monthly income.

Working with the banking and credit union regulators, the FHA, the VA, the USDA and the Federal Housing Finance Agency, the guidelines of the Home Affordable Modification Program are expected to become standard industry practice in pursuing affordable and sustainable mortgage modifications. Home Affordable Modification will work in tandem with an expanded and improved Hope for Homeowners program.

Banks and other mortgage providers can begin immediately to modify eligible mortgages under the Home Affordable Modification program so that at-risk borrowers can better afford their mortgage payments right now.


Eligibility requirements for Home Affordable Modification are as follows:

  • The mortgage loans must have originated on or before Jan. 1, 2009.

  • The mortgage loans must be first-lien loans on owner-occupied properties with unpaid principal balance up to $729,750. Higher limits are allowed for owner-occupied properties with two to four units.

  • The mortgage payment (including taxes, insurance, and homeowners association dues) must be more than 31 percent of your gross monthly income.

  • All borrowers must fully document income, including a signed IRS 4506-T, two most recent pay stubs, most recent tax return, and must sign an affidavit of financial hardship.

  • Property owner occupancy status will be verified through borrower credit report and other documentation.

  • Modifications can start from now until Dec, 21, 2012. Loans can be modified only once under the program.
Your lender can help you to explore if Home Affordable Modification is the right solution for you and your situation.

To apply for Home Affordable Refinance or Home Affordable Modification, gather in advance all the needed information and documents before calling your lender, including:

  • The monthly gross income of all the borrowers on your loan

  • Recent pay stubs

  • Your most recent income tax return

  • Information about any second mortgage

  • Account balances and minimum monthly payments due on all credit cards

  • Account balances and monthly payments on all other debts such as student loans and car loans.
The Making Home Affordable Program is scheduled to be in effect through June 2010.


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