Making Home Affordable Program

On March 4, 2009 President Obama announced the Making Home Affordable Plan, aimed to help homeowners in financial distress. The Making Home Affordable Program was designed to help homeowners like you who are experiencing a financial hardship avoid foreclosure by modifying your original mortgage into a more affordable one. The purpose of this program is to reduce your mortgage payment to 31% of your gross income (including escrow fees), using a rate floor of 2%. If your mortgage payment is already at 31% or less of your gross income, you do not qualify for the MHA Program. This doesn’t necessarily mean there aren’t any other options for you. Your loss mitigation Attorney will be able to review your case and tell you what other options you have. One of the main requirements for the Making Home Affordable Program is that you have a verifiable financial hardship such as job loss, reduced income, illness, separation, or death. Also, if you have an option ARM loan that will soon recast making your mortgage payment higher & unaffordable you may qualify.

Other requirements are:

Principal Balance must be no greater than $729,750. Higher limits are allowed for properties with 2 – 4 units.

• 2 units = $934,200
• 3 units = $1,129,250
• 4 units = $1,403,400

- The subject property must be owner-occupied. This means that investments properties are not eligible for this program.
- Loan must’ve been originated on or before January 1, 2009.

Unless you have a Fannie Mae or Freddie Mac loan it is up to the lender to decide if they will participate in this program. The government offered incentives for lenders who participate. They will earn $1,000 per granted modification – that is after the 3 month trial when the new permanent loan modification terms take effect as well as $1,000 yearly for 3 years as long the borrower stays current.

Some of the documents your lender will require to review your case under the MHA Program are:

• Financial Sheet – A list of your monthly expenses & income.
• Making Home Affordable Hardship Affidavit – Here you explain your hardship to the lender.
• Recent Proof of Income – Copies of your pay-stubs, letter from employer stating how much you make, 1099 form, or Profit & Loss Statement.
• Bank Statements – 2 most recent bank statements
• Tax Returns – Last two years of tax returns
• 4506 – T – This is a form that is required. By you signing this form you authorize your lender to get a copy of your tax returns for the years specified on the form.

If your property taxes & insurance are not escrowed, you will also need to provide your lender with:

• Property Tax Bill
• Insurance Declarations Page

Working with a Loss Mitigation Attorney will greatly increase your chances of getting a loan modification. Lenders are overloaded with Loan Modifications requests and you could get declined for the most insignificant detail.

For a complimentary consultation call 1.800.738.1170

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