On Wednesday of this week, the US Treasury released the details of their “Making Home Affordable” plan – which we have also come to know as “The Obama Refinance Plan”. In my opinion, the details of the plan were well thought out when compared to the previous “FHA Secure” and “FHA Hope for Homeowners” plans. The Making Home Affordable plan might actually help a few people who are in distress!
The Making Home Affordable plan has two primary components to it for people who are in need of help: One part is called the Making Home Affordable Refinance plan and the other is called the Making Home Affordable Modification plan.
Home Affordable Refinance
I suspect that this part of the plan will not be all that helpful to people who own homes in Arizona. If you own a home in Arizona, you can go up to 95% of the homes value to refinance with an FHA loan – but for some reason, someone told the government decision makers that loan to value requirements were 80%… so they thought if they stretched it to 105%, it might help.
But the fact is that most people in Arizona who currently “can’t” refinance still won’t be able to – unless they are in the small window of 95% – 105% of their homes value… which will probably me more than a small handful, but not as many as the government thinks.
Home Affordable Refinance Eligibility:
Home Affordable Modification
The modification portion of the plan will probably help quite a few more people than the refinance portion. With the details of this plan now released, mortgage servicers now have guidelines and incentives in place to deal with borrowers who call and are not late on their mortgage, but still need help. Prior to this plan, people were almost unilaterally being turned away when they were not late.
The modification portion of the plan will also make it easier for people who are in trouble to get help. Now, they have a much higher chance of getting help simply by calling their lender. Prior to the plan being released, it was a little unclear to people what the best way to get a loan modification done was (Call a loan modification company? Call a loan modification attorney? Call your servicer?)
Home Affordable Modification Guidelines:
More information about both programs can be found at FinancialStability.gov.
Arizona Mortgage Rates March 6 2009
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I guess if there’s an upside to the present real estate mess, its that renters like myself will be able to afford to get into the market soon. Glad I didn’t buy into the top but am looking for an entry point. Maybe in a year or so.
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