Fantastic News for Homeowners! A $25 billion settlement has been reached between the federal government and 49 states & the nation’s five largest loan servicers Bank of America, JPMorgan Chase, Wells Fargo, Citigroup . The servicers have agreed to provide mortgage reductions, refinancing and other loan modification help to homeowners hurt by the housing collapse.
Read the article below to understand what this settlement may mean for you.
As more and more homeowners faced foreclosure in recent years, the Federal Government instituted the “Making Home Affordable Program” as part of the Obama Administration’s broad, comprehensive strategy to get the economy and the housing market back on track. One of these programs, the Home Affordable Modification Program, sought to help existing homeowners by modifying their first and/or their second mortgage loans.
However, this program has been an utter failure because of the increased administrative burdens and increased tax burdens on lenders. Also, considered the limits of the programs with the constraining egligibility requirements below:
The Home Affordable Modification Program Eligibility Requirement
Under the guidelines established by the Department of the Treasury, you may only be eligible for a modification under the government’s Home Affordable Modification Program
• Your loan is owned by Fannie Mae or Freddie Mac, or the loan is administered by a servicer participating in the Making Home Affordable program and the servicer is granted permission by the owner of theloan to modify it.
• You occupy the house you’re calling about as your primary residence.
• Your first mortgage is in foreclosure, you are delinquent or default is reasonably foreseeable.
• Your loan closed before January 1, 2009.
• Your first mortgage loan amount is $729,750 or less for a single unit home.
• Your home consists of 4 units or less, and you must occupy one unit.
• Your loan has not been previously modified under HAMP.
• Your first mortgage debt-to-income ratio is over 31 percent. This means that your monthly payment is more than 31 percent of your monthly pre-tax income (or your combined monthly income in the case of co-borrowers). In this case, your “monthly payment” includes principal, interest, property taxes, hazard and flood insurance and homeowner owners association due or condominium fees (if applicable). Mortgage
insurance payments are not included in this calculation. The HAMP program expires on December 31, 2012.
More information on HAMP can be found at www.makinghomeaffordable.gov.
For a discussion on the failures of the program check out
If you think you might be facing foreclosure, please seek a free consultation with St. Louis bankruptcy attorney Tim Powderly.