The Obama supervision unveiled the final details of its "Making Home Affordable Program," which is designed to help up to 9 million American families refinance or modify their Long Island mortgage or any other mortgage to a cost that is affordable now and into the future.
One of the initiatives in this program is aimed at helping struggling homeowners "modify" their loans to avoid foreclosure. Here are some common Questions and Answers about the Modification Initiative in the program.
Modification Initiative
Modification Opportunities For Those at Risk For Foreclosure
Who is eligible?
To apply for a Home Affordable Modification, you must:
o Own and currently occupy a one- to four-unit home.
o Have an unpaid significant equilibrium that is equal to or less than 9,750 (for one unit properties).
o Have a loan that was originated before January 1, 2009.
o Have a mortgage cost (including taxes, insurance, and home owners relationship dues) that is more than 31% of your gross (pre-tax) monthly income.
o And, have a mortgage cost that is no longer affordable, perhaps because of a significant turn in revenue or expenses.
If you answered Yes to all of these questions, you may be eligible for the Modification Initiative.
Am I eligible if I missed some mortgage payments?
Yes. If you missed two or more mortgage payments and answered "yes" to the Modification Initiative requirements above, you may be eligible for a loan modification.
Do I need to be behind on my mortgage payments to be eligible for a Home Affordable Modification?
No. Responsible borrowers who are struggling to remain current on their Long Island mortgage payments are eligible if they are at risk of imminent default. Examples of being "at risk" comprise facing a significant increase in your mortgage cost or a allowance in your income. Contact me to discuss your definite situation.
I have a second mortgage. Am I still eligible?
Yes, but only the first mortgage is eligible for a modification.
I have an Fha loan. Can it be modified under this program? Are all loans eligible?
Most conventional loans together with prime, subprime, and adjustable loans; loans owned by Fannie Mae and Freddie Mac as well as underground lenders; and loans in mortgage backed securities are eligible for a modification. Contact me to discuss your definite situation.
I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?
Yes. Mortgages on two, three and four unit properties are eligible as long as you live in one unit as your original residence.
What does the Modification Initiative do?
If you are eligible for this plan and are approved, you will be put on a trial modification for three months at a new interest rate and payment. If you successfully make the payments and are current at the end of the three-month trial period, your servicer will execute a permanent modification agreement that will lower your interest rate to a fixed rate for five years.
What happens after five years?
Beginning in year six, the rate may increase no more than one division point per year until it reaches the "rate cap" in your modification agreement, which is basically the market interest rate on the date the modification is finalized.
That means your rate can never be higher than the market rate on the day your loan is modified. This is great news because rates are currently at historic lows... And you can lock in now.
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