Today, the Obama administration announced an expansion of the Making Home Affordable plan, which gives homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments.
Housing and Urban Development Secretary Shaun Donovan announced that the program now covers homeowners who are current but up to 125% underwater on their mortgage. Previously, only those homeowners who were 105% underwater qualified, so this opens the door to a significant number of additional people who need help. According to our analysis of the Q1 Zillow Real Estate Market Reports, that means up to 36% of all homeowners with mortgages, or 20.1 million households, could now potentially qualify for the plan. However, a requirement for this program is that the loan must be backed by Fannie Mae or Freddie Mac. Check if your loan is backed by Fannie or Freddie here.
It seems that the official Making Home Affodable Web site, however, still has the old 105% number on their refinance eligibility tool. Hopefully someone will update this soon.
If you are underwater on your mortgage, a great way to find someone who may be able to help you refinance is by submitting a loan request–anonymously–through Zillow Mortgage Marketplace. Your request will be posted to the marketplace, where thousands of lenders can assess your situation and provide you with custom quotes if they are able to help you.
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- Categories: Finding a Loan on Zillow, Loan Modification, Refinance
Comments
13 Comments so far
Leon R
What about loans that are not covered by Fannie or Freddie such as Countrywide (now with BOFA)?
Matt Carter
Countrywide sold A LOT of mortgages to Fannie and Freddie. Don’t assume your mortgage isn’t owned or guaranteed by Fannie or Freddie until you check their respective Web sites:
Borrowers can determine whether Freddie Mac owns their mortgage by completing an online form at http://www.freddiemac.com/mymortgage.
Fannie Mae’s loan lookup tool is located at http://loanlookup.fanniemae.com/loanlookup/.
Tom Ruff
I believe you mean 125% of value or 25% underwater, not 125% underwater.
Michelle
I want to know the same as Leon R, is there any hope for the one of us that have loans with Countrywide? or WAMU?
Nick
I agree - what about Countrywide???????????
Ryan
It doesn’t matter who your LENDER is (i.e. Countywide (BofA), Wamu (Chase), etc) it matters who is BACKING your loan. Many loans obtained through Countrywide, etc are BACKED by Fannie Mae, Freddy Mac. You might be sending a check to BofA every month, but your loan could in fact be backed by Fannie Mae of Freddy Mac. You need to find out if your loan is backed by either regardless of who your lender is. They’re two different things.
Mary Miller
You can check if your loan is backed by Fannie or Freddie at: http://makinghomeaffordable.gov/loan_lookup.html.
Dan
It’s another desperate grasp by the government to try to deter people from walking away from their mortgages, or worse, a public relations gimmick to show the public that they’re trying to do something about the biggest problem in the economy. Some 20% of home owners, about 20 million, are upside down on their mortgage and that’s a huge threat to the banking system with or without TARP. A borrower 15% or more upside down is a prime candidate to walk away from their mortgage even with good credit. One who’s 5% under water is far less likely to walk. Many of the upside down loans are investment properties, and they don’t qualify for any type of financing now. That’s one of the main flaws in every refinance or modification program the government has created or considered.
Borrowrs who don’t want to walk will find it fairly hard to get an affordability loan, or to benefit much if they do qualify. First, not all lenders offer the affordability loan at all. Second, those who do will not eagerly underwrite an incredibly risky loan at the new higher levels of 105-125% LTV. Third, the program doesn’t allow pay off, or even pay down, of any second mortgage, and the second mortgage lender must subordinate at some level over the 105-125% LTV of the first mortgage. Why would they agree to that?
Many of those who do qualify will find it hard to benefit. The new interest rate must be low enough to benefit the borrower. General levels of interest have risen about 1/2% in the last month. The best prime borrowers now can get 5.375% for a 30-yr fixed rate with typical closing costs. That isn’t low enough for many to benefit much because their loan is already in the 5%’s. Finally, the pricing of the affordability loans is such that almost all borrowers with a credit score less than 680 is priced completely out of any beneficial rate. The “pricing hits” would total 3.25% fees for any borrower with a qualifying credit score 620-679 at any LTV over 70%, if they have any second mortgage at all. Today that would put the 30-yr fixed rate at par of about 6.25% from lenders with the best rates, and that won’t benefit many. An ARM rate would be no better.
Pay attention ………things are changing | Northeast Scottsdale Real Estate
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Don
Why would anyone want to be “locked in” to an upside down house for decades to come? I had this problem and chose to Short Sale my house instead. Then you can buy a new house at much lower prices 2 years from now. We have at least 2 or three years worth of Real Estate problems to work through…
See: http://www.anaheimnewsletter.net/Don/Don.htm for my thoughts on this topic, then look at Help for the Homeowners tab…
Steven
Don,
I don’t think you realize how difficult it can be to get
a short sale approved let alone a buyer and have the deficiency balance forgiven. More times than not the bank will pursue the deficiency amount after closing or ask for a promissary note prior to close. A get out get back in solution doesn’t seem realistic in this market. The advice you should be offering is seek HUD-approved counceling so they can think over what is the best path to take.
Gee Gee
I am one of the one’s who has an 5/1 which will reset 5/2010. Planned to refinance before ARM reset but of course mortgage is underwater by more the 180%. My credit is excellent 814.All bills including mortgage paid on time. If the opportunity to refinance was available to me, I would and could make the payments at this point. However, I would be able to cover the payments once the ARM resets. I have a Freddie Mac loan, but currently don’t qualify for assistance since I am current and have no hardship. Will have to wait til ARM reset and become deliquent on loan to possibly qualify. Don’t seem to have any other options.
Sara
I know that my loan is not secured by freddie or fannie, i’m with washington federal savings and loan. Is there any help in the distant future of getting help with refinancing?