Eligibility details for the Homeowner Affordability and Stability Plan (the "Plan") are now available on the U.S. Department of the Treasury website (www.treasury.gov). The Plan is part of President Barack Obama Administration’s efforts to stabilize the housing market and assist certain responsible homeowners that are at risk of foreclosure due to the current recession and declining property values. The Plan has two primary programs – the refinancing of existing conforming mortgages owned or guaranteed by Freddie Mac and Fannie Mae into low fixed mortgage loans and incentives for mortgage lenders to modify existing first mortgages for eligible homeowners that are struggling to make their current mortgage payments.
Under the refinancing initiative, the Plan will provide refinancing into a 30 or 15 year mortgage loan, at low mortgage fixed rates currently available in the market for 4 to 5 million homeowners who have conforming mortgages owned or guaranteed by Freddie Mac and Fannie Mae that under current rules do not have access to such low mortgage rates. You should contact your mortgage lender to confirm if your mortgage is owned or has been securitized by Freddie Mac or Fannie Mae. Mortgage lenders will start taking applications for the program after March 4, 2009.
Under the mortgage loan modification initiative, the Plan provides incentives for mortgage lenders to modify first mortgage loans for borrowers that are at risk of foreclosure regardless of who owns or services the mortgage. To qualify for a mortgage modification the borrower must occupy the house as its primary residence; the monthly mortgage payment must exceed 31% of the borrower’s monthly gross income; and the loan is not large enough to exceed current Freddie Mac and Fannie Mae loan limits.
If you think that you may be eligible for the refinancing or loan modification programs under the Plan, you should collect the information that you will need to provide to your mortgage lender. This information may include among other information:
- Gross monthly income information including recent pay stubs.
- Recent income tax returns.
- Second mortgage (including HLOC) information.
- Credit card payment and balance information.
- Student loans, car loans and other loan information.