Underwater Homeowners have new hope!

The Federal Government is starting a new initiative to help those homeowners who are underwater on their home by at least 90 days. In order to qualify for the Home Affordable Modification Program also known as H.A.M.P., Homeowners jumped through hoop after hoop to obtain 1. A lower interest rate and 2. A more affordable mortgage payment. In the process of completing the H.A.M.P., homeowners had to submit several forms of paper work including financial and Hardship documentation. 

The new program which has yet to be named, eliminates the requirement of income documentation and financial hardship. This initiative is being pushed by the Federal Housing Finance Agency (FHFA) which is responsible for the regulation of Fannie Mae and Freddie Mac and will begin starting July 1,2013. This program has an ending date of August 1, 2015 but with our wonderful government in place, I'm almost positive this date will be extended.

By July 1st,2013  mortgage servicer's must identify delinquent or as I like to call "underwater Borrowers" and send them a letter offering the modification. If you're able to take part in this program here's the low-down: 

1. You will receive a lower interest rate equal to lower than your current rate based on the average of 30-year fixed rate mortgages.

2. Your new term will be extended to a 40 year term. 

3. Borrowers who owe more than their homes are worth will pay no interest on up to 30% of their unpaid balance. 

In order to Qualify: 

1. Homeowner must be between 90 days and 24 months delinquent on their loans.

2. The first mortgage must be at least 80% of their home value. 

Both the FHFA and Association of Consumer Advocates note that more money can be saved by using other programs that require documentation such as HAMP. 

Interesting FACT: About one in five homeowners own more on their mortgages than their homes are worth! 

Thanks for reading! 

Phillip Tinsley-Realtor/Blogger, Century 21 Scheetz 

Direct (317) 353-4695