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Federal Loan Assistance Programs
If your home loan has been “sold” to Fannie Mae or Freddy Mac, there is a chance that you now may be able to refinance an “underwater” loan (a loan that is for more than the house can sell for). Learn your options and educate yourself below. The H.A.R.P. Home Mortgage Refinance Assistance Program has been updated to include this type of loan with higher limits and fewer restrictions. Largely “under the radar” for most homeowners are several federal programs put forward to help stem the tide of bank foreclosures. These programs have been mostly overlooked by our media but once in a while a blip shows up on your screen. Such was the case this week on October 24, 2011, when the Federal Housing Finance Agency published this press release: FHFA, Fannie Mae and Freddie Mac Announce HARP Changes to Reach More Borrowers (PDF document). Be sure to read this press release – it has a very interesting graph on page two which shows where the refi mortgage market money goes. The HARP program (Home Affordable Refinance Program) is only available to homeowners who’s home loan has been bought by Fannie Mae: http://www.fanniemae.com/portal/index.html (The Federal National Mortgage Association) or Freddie Mac: http://www.freddiemac.com/ ( The Federal Home Loan Mortgage Corporation). Both are government sponsored enterprises that buy mortgages from lending institutions in order increase the money supply available for home loans. It allows banks and lenders to sell loans and get more cash to make new loans. To see if your loan has been acquired by Fannie or Freddy and your are eligible, Click here: http://www.FannieMae.com/loanlookup/ and/or here: https://ww3.FreddieMac.com/corporate/ On September 7, 2008, Federal Housing Finance Agency (FHFA) director James B. Lockhart III announced he had put Fannie Mae and Freddie Mac under the conservatorship of the FHFA. The action has been described as "one of the most sweeping government interventions in private financial markets in decades". By this time I think all of us know why! This and other similar programs have been what I would describe as a colossal failure, and in my opinion are largely politically motivated. People ask their lawmakers to DO SOMETHING! So they do, and the programs sound great on the surface and look good in a press release – until you read them. If you are still awake when you finish, AND you understand it, you are either in dire straights are an exceptional person. You know that race where you jump over lots of hurdles before you get to the finish line? These programs are modeled after that kind race. The easiest way to see if you qualify is to talk to your loan rep. From Jon Wager of Legacy Group’s Mortgage Newsletter: “The guidelines are currently limited to the extent that the people that really need the help can’t really get it. Don’t get me wrong- it’s been a great tool for a lot of people. I’ve used it to reduce many people’s payments in the last few years- but the reality is that most of them could already afford their payment. I was just using the program to save them money (a worthy and noble cause, to be sure). The trouble with the program is that it’s too limited. Good sense might make the argument that if you reduce someone’s mortgage payment who’s struggling with being underwater that they will be in a better position to afford their home and not be foreclosed on. Duh. Many factors have been major speed-bumps. They range from things like: having mortgage insurance and the MI company not participating, being too far underwater, or having a second mortgage - and the list goes on. In my humble opinion, the glaring problem that is not yet addressed, (in the HARP update) and the way I interpret the letter, is that the program is voluntary for lenders, servicers and mortgage insurers. So far that’s been the biggest problem- not all banks and MI companies are playing ball. It’s time for everyone to get in the game. I think that HARP should be required for anyone who wants to continue to do business with Fannie and Freddie. They provide over $5.7 TRILLION in funding for the US mortgage markets. They are the big gorilla and should throw some weight around.” I agree with Jon’s comments, but I would not give up hope – you may be one of the lucky few who can get some help from one of these programs. Here is a link to the Federal Assistance website: http://www.makinghomeaffordable.gov/pages/default.aspx This website covers all of the currently available assistance programs, and can answer a lot of questions if your are facing a foreclosure situation. Click here: Programs to see various options for different scenarios. You can learn about “short sales” foreclosures, and refi options all with Federal assistance. Read my blog “Real Estate 101” here: http://seattlefirsthome.com/blog Search for homes on line: http://seattlefirsthome.com/index.cfm/page/76837/Search_for_Homes.html Learn about home buying and selling: http://www.mapleleafnews.com/Seattle_Maple_Leaf_Real_Estate_Page.htm Learn about what your home is worth: http://www.cmaseattle.com/ |
