| President Obama's sweeping stimulus plan is aimed at | | | | borrowers a solution so the high foreclosure rates |
| helping millions of Americans stay in their homes with | | | | can be decreased and give our economy a chance to |
| help to either refinance or modify their current | | | | get back on track. |
| mortgages into affordable payments. The Home | | | | Since this is a federal program, there are standard |
| Affordable Planm, or HAMP, has several components, | | | | approval guidelines that every borrower must meet. |
| and depending on your situation, you may qualify for | | | | The secret to getting the help you need is to be |
| assistance using one of the federally subsidized | | | | informed and prepared before you contact your |
| options. Which one right for you? | | | | lender to apply. There is a standard 4 step formula |
| - The Home Affordable Modification Plan-HAMP- is | | | | that participating banks use to determine who |
| designed for borrowers facing a financial hardship and | | | | qualifies-you can learn and use this very same |
| unable to take advantage of the current low interest | | | | formula to make certain your application has the best |
| rates due to loss of equity or low credit scores. | | | | chance of approval. Take advantage of a software |
| Under this plan, participating lenders will be paid to | | | | program that actually mimics the federal formula-all |
| modify loans for qualified homeowners. The terms | | | | you do is put in your own income and expenses, and |
| offered include interest rates reduced to 2%, loan | | | | all the calculations are done for you. The Loan Mod |
| terms extended to 40 years and principal deferral or | | | | Quick APP software calculates your debt ratio, |
| forgiveness. If you have lost significant equity due to | | | | disposable income, new interest rate and new target |
| decreased home values and are not able tor | | | | payment. These are all figured immediately for you. |
| refinance or sell your home, you could be eligible | | | | Use this information to make any necessary |
| under this part of the plan. | | | | adjustments on your financial statement so that you |
| - The Home Affordable Refinance Plan-HARP- is | | | | have the best chance of approval. |
| designed to offer a new loan at current market rates | | | | If you need help and are not sure how to begin, you |
| for homeowners who are current on their | | | | can learn more about the programs by visiting the |
| mortgages, but who do not qualify for a standard | | | | government website makinghomeaffordable.gov. |
| refinance due to loss of equity. If your mortgage | | | | Regardless of the program, you will have to |
| balance is 125% of the current value or less and you | | | | complete an application and provide proof of your |
| have not been more than 60 days late in the last 12 | | | | income. A word of caution-before contacting your |
| months, and your current loan is owned or serviced | | | | lender make sure you are prepared and understand |
| by Fannie or Freddie you may qualify under this plan. | | | | the basic approval criteria so that you can work on |
| - The Hope for Homeowners refinance plan has been | | | | your application ahead of time. The information you |
| expanded to accept more borrowers-since it's | | | | provide will determine your eligibility-make sure you |
| inception only 70 loans have been completed. | | | | do not make a mistake that could cost you the help |
| However, the new guidelines will open the doors for | | | | you need and deserve. Use the software program |
| more borrowers to qualify using this FHA insured | | | | designed just for homeowners and you will avoid |
| refinance plan. The lender will be paid by the | | | | costly mistakes. |
| Treasury Department to refinance qualified | | | | You will be asked to submit a hardship letter |
| borrowers into new government insured loans at | | | | describing your situation, and financial statement |
| market rates. | | | | detailing your income and expenses, and proof of |
| Each circumstance is different, and so you may be a | | | | your household income. All of this will be reviewed to |
| candidate for one of these programs because of | | | | determine if the information you have provided fits |
| your unique situation. Many homeowners across the | | | | into the federal formula. You can take a lot of the |
| country have been hit with the perfect storm of loss | | | | confusion and frustration out of the process by using |
| of income, increasing mortgage payments and | | | | a software program designed just for homeowners. |
| substantial loss of equity because of the housing | | | | Simply input your income and expenses and it |
| market meltdown. Unfortunately, this means that | | | | calculates your debt ratio, new target payment, new |
| there are few options for borrowers to get out of | | | | loan terms, disposable income and everything else |
| their financial hardship. The Treasury Department is | | | | you need to know. Learn and prepare ahead of |
| really pushing banks to step in and offer these | | | | time-saving your home is worth the effort. |