February 19th 2009

Homeowner Stability plan and what it means to you.

Under the plan when you are current on your mortgage and you could not previously refinance, you may now have the option and the opportunity to refinance into a fixed rate loan.

When the loan is held by Fannie Mae and Freddie Mac you have the option got refinance. In matter to find out if your loan is now a Freddie Mea or Fannie Mea owned loan you need to contact your mortgage servicer sometimes after March 4^th 2009.

You are eligible to refinance when your will fall in the guidelines outlined below and the final eligibility will be detrained by your lender and it is based on your current financial situation.

• Your current first mortgage is not in an excess of 105% of the current market value.
• You occupy the home as your primary residence, NOT for investment properties.
• Your current mortgage payment is more the 31% of your monthly gross income
• Your loan is not larger then current Freddie Mea and Fannie Mea loan limits

The total details of the eligibly have not been announce as of today and you would have to wait until March 4^th to find out the exact details of the program.

When you have more then one mortgage against your home and your first mortgage is under 105% of the total value of the property you might be eligible for refinance. Only the first will be eligible for refinance and not the second.

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.

The interest rate you can refinance in will be detrain buy the current market rates and rates vary from lender to lender. The refinancing will NOT change what you own on the loan; only a loan modification can possible reduce the total loan amount.

Here is what you can do in the mean time;

Pull the following paperwork together for review  

• Most recent tax return
• Income verification like bank statements, pay stubs
• Information about your current bills like car loan, student loans and other
• Utility bills and other regular bills like pet expenses other then loans
• Hardship letter (for loan modifications)

 When you are already behind, pull the above items together and work with your mortgage servicer to modify your current mortgage. In man times they will loser your interest and maybe forgive a certain amount of the money you might owe.

A lender is not required to modify a loan; loan modification is on a voluntary basis and a modification should not cost you anything.

Bettina Settles