| 1. What help is available for borrowers who stay
current on their mortgage payments but have seen their homes decrease in value? |
| Under the Homeowner Affordability and Stability
Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to
lower their interest rates because their homes have decreased in value, may now have the opportunity
to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac
will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed
in mortgage backed securities. |
| |
| 2. I owe more than my property is worth, do I
still qualify to refinance under the Homeowner Affordability and Stability Plan? |
| Eligible loans will now include those where the
new first mortgage (including any refinancing costs) will not exceed 105% of the current market value
of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may
qualify. The current value of your property will be determined after you apply to refinance. |
| |
| 3. How do I know if I am eligible? |
| Complete eligibility details will be announced on
March 4th when the program starts. The criteria for eligibility will include having sufficient income
to make the new payment and an acceptable mortgage payment history. The program is limited to loans
held or securitized by Fannie Mae or Freddie Mac |
| |
| 4. I have both a first and a second
mortgage. Do I still qualify to refinance under the Homeowner Affordability and Stability Plan? |
| As long as the amount due on the first mortgage is
less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to
refinance under the Homeowner Affordability and Stability Plan. Your eligibility will depend, in part,
on agreement by the lender that has your second mortgage to remain in a second position, and on your
ability to meet the new payment terms on the first mortgage. |
| |
| 5. Will refinancing lower my payments? |
| The objective of the Homeowner Affordability and
Stability Plan is to provide creditworthy borrowers who have shown a commitment to paying their
mortgage with affordable payments that are sustainable for the life of the loan. Borrowers whose
mortgage interest rates are much higher than the current market rate should see an immediate reduction
in their payments. Borrowers who are paying interest only, or who have a low introductory rate that
will increase in the future, may not see their current payment go down if they refinance to a fixed
rate. These borrowers, however, could save a great deal over the life of the loan. When you submit a
loan application, your lender will give you a "Good Faith Estimate" that includes your new
interest rate, mortgage payment and the amount that you will pay over the life of the loan. Compare
this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.
|
| |
| 6. What are the interest rate and other terms of
this refinance offer? |
| The objective of the Homeowner Affordability and
Stability Plan is to provide borrowers with a safe loan program with a fixed, affordable payment. All
loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate. The rate
will be based on market rates in effect at the time of the refinance and any associated points and
fees quoted by the lender. Interest rates may vary across lenders and over time as market rates
adjust. The refinanced loans will have no prepayment penalties or balloon notes. |
| |
| 7. Will refinancing reduce the amount that I owe
on my loan? |
| No. The objective of the Homeowner Affordability and
Stability Plan is to help borrowers refinance into safer, more affordable fixed rate loans.
Refinancing will not reduce the amount you owe to the first mortgage holder or any other debt you owe.
However, by reducing the interest rate, refinancing should save you money by reducing the amount of
interest that you repay over the life of the loan. |
| |
| 8. How do I know if my loan is owned or has been
securitized by Fannie Mae or Freddie Mac? |
| To determine if your loan is owned or has been
securitized by Fannie Mae or Freddie Mac and is eligible to be refinanced, you should contact your
mortgage lender after March 4, 2009. |
| |
| 9. When can I apply? |
| Mortgage lenders will begin accepting applications
after the details of the program are announced on March 4, 2009. |
| |
| 10. What should I do in the meantime? |
| • |
information about the gross monthly income of all
borrowers, including your most recent pay stubs if you receive them or documentation of income you
receive from other sources |
| • |
your most recent income tax return |
| • |
information about any second mortgage on the house
|
| • |
payments on each of your credit cards if you are
carrying balances from month to month, and |
| • |
payments on other loans such as student loans and car
loans. |
|
President Obama wants to save your home and has developed a $75 Billion Homeowner Affordability and
Stability Plan to do just that. Millions of responsible families who make their month payments
have seen their property values fall and are now unable to refinance at lower mortgage rates.Millions of workers have
lost their jobs and are now struggling to stay current on their mortgage payments.
Neighborhoods are struggling, as each foreclosed home reduces nearby property values. The
Homeowner Affordability and Stability Plan will help up to 9 million families restructure or
refinance their mortgages to avoid foreclosure. For many families, refinancing could reduce
mortgage payments by thousands of dollars per year.
