Mortgage Refinance and Mortgage Modification: The Government’s Making Home Affordable Program

Are you having trouble paying your mortgage? Do you want to take advantage of low current mortgage rates and refinance or loan. Do you want to have your mortgage modified to lower the monthly payments?  

The Making Home Affordable program might help you. The program was devised by the Obama Administration to end the housing crises and to put a floor on the relentless dropping him home prices.

Refinance

The program also included a provision for people who want to take advantage of  today’s mortgage rates and do a mortgage refinance but were unable to do so because they did not have enough equity in their home to refinance.

Most lending institutions and banks will only offer a home loan or let you refinance a loan with an 80% loan-to-value ratio. Meaning all your home loans, mortgages, home equity loans, etc, can equal to more than 80% of the value of your home.

Originally the program allowed for loan modifications up to 105% of the value of your home. The LTV was then raised to 125% of the value of your home.

Not everyone qualifies for either a mortgage modification or for a mortgage refinance.  To be eligible for the refinancing program your mortgage must either be held by Freddie Mac or Fannie Mae or have been securitized by either Freddie or Fannie. Securitization is the process of bundling mortgages together into securities and selling those securitizes to investors.

You must also be current on your monthly mortgage payments to do a home refinance. You also must occupy a one unit to four unit home to qualify. The mortgage loan refinance program expires on June 10, 2010, meaning the refinancing of your home mortgage must be closed and funded by June 10, 2010.

Mortgage Modification

The program was initially designed to help people who were struggling to make their mortgage payments by offering incentives to mortgagee holders to change mortgage loan terms, in particular lowering monthly mortgage payments and forgiving a portion of the loan.

To be eligible for the home loan modification you must occupy a one unit to four unit home, have a mortgage principal balance of $729,750 or less for a single family home, two to four unit homes have higher limits. Have a mortgage loan that originated on or before January 1, 2009. Your mortgage payments must exceed 31% of your gross monthly income.

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