On March 4, 2009, President Barack Obama unveiled the “Making Home Affordable” program as part of the Emergency Economic Stabilization Act.  This program offers assistance to residential homeowners to avoid the loss of their homes through foreclosure by offering two plans: the Home Affordable Refinance Program and the Homeowner Affordable Modification Plan. The ultimate question poised by many Arizona homeowners is whether these plans will provide them with any relief or assistance.  Unfortunately, many Arizona homeowners are in need of relief from foreclosure as this State has experienced some of the greatest depreciation of residential home values. 

As of October 30^th there had been over 650,000 Trial Modifications issued under Home Affordable but only 1700+ actual permanent modifications. Many homeowners are still going to foreclosure. Don’t go it alone. The lender has more money and more time than you. Make it a fair fight and let Thomson Law guide you through the process.

While the new plans offer some forms of relief, each individual borrower must qualify in order to participate in the plans and to be eligible to receive any of the benefits afforded.  A detailed full text of the plan can be viewed on the Treasury Department website located at www.financialstability.gov.  In addition, a Questions & Answers memorandum regarding the plans issued by the Treasury Department may be viewed by clicking here.

The basic qualification requirements for the Home Affordable Refinance Program are:

1.       A mortgage currently owned by Fannie Mae or Freddie Mac

2.       Owner occupied primary residence only;

3.      Current property value must not exceed 105% of the balance of the
    current first lien;

4.       Must be current on payments (no more than 30 days late in the last 12
    months); and

5.       Must be in eminent danger of a default.

Some major limitations with this program are:

1.       Does not apply to loans other than Fannie Mae or Freddie Mac;

2.       Does not apply to loans that have a balance in excess of $729,750;

3.       Properties with negative equity in excess of 105% loan to value do not
   qualify;

4.       Second homes, investment properties or lot loans do not qualify;

5.       Borrowers who are unemployed or have insufficient income levels may
   not qualify; and

6.       Borrowers who have been more than 30 days late do not qualify.

The basic qualification requirements for the Home Affordable Modification Program are:

1. Owner occupied primary residence only;

2. Does not apply to loans that have a balance in excess of $729,750;

             3. Loan must be originated prior to January 2009;

             4. Debt to income ratio must be greater than 31% of gross income; and

             5. Mortgage payment no longer affordable due to significant change in 
    income or expenses.

Some of the major limitations of this program are:

             1. Does not apply to loans that have a balance in excess of $729,750

             2. Borrowers who are unemployed or have insufficient income levels may
    not qualify;

             3. Second homes, investment properties or lot loans do not qualify; and

            4. Borrowers who are unemployed or have insufficient income levels
             may not qualify;

In summary, these programs may offer some assistance to homeowners who meet the qualification standards.  However, these programs do not offer relief to those homeowners who do not meet the credit requirements, who have 2^nd lien loans or who have loans that are substantially up-side-down due to drastic depreciation of their home value. To learn more about the details of the plan, click here for more information.