Struggling Homeowners May Qualify For Help Under The Homeowner Affordability And Stability Plan

February 19th, 2009 by Reed Allmand

According to an article in the Star-Telegram, struggling homeowners facing foreclosure may qualify for help under the Homeowner Affordability and Stability Plan.

Homeowners who qualify for the program include:
• Homeowners facing foreclosures
• Homeowners delinquent in their mortgage payments with no imminent foreclosure
• Homeowners who live in the residence.
• Homeowners with a mortgage that’s more than 31 percent of their monthly gross income.
• Homeowners with a mortgage that does not exceed current Fannie Mae and Freddie Mac loan limits.

Homeowners who meet the above qualifications may be able to modify their home mortgages under the Homeowner Affordability and Stability Plan and avoid foreclosure.

On the other hand, homeowners who are current on their mortgage; but who owe more on their home than it is worth may be eligible to refinance their homes with a 30 year or 15 year fixed rate loan under the Homeowner Affordability and Stability Plan; but only if their mortgage is with Fannie Mae or Freddie Mac. To qualify for this program, homeowners cannot owe more than 105 percent of their home’s current value on their first mortgage. So if you have a home that is worth $100,000, your first mortgage can’t exceed more than $105,000. Many homeowners facing foreclosure are way over this percentage when underwater with their loans, so I don’t see this helping many struggling homeowners; but it’s a start. Also, homeowners facing foreclosure can’t apply for these programs until March 4th. If a homeowner is facing imminent foreclosure, it is advisable to not wait until March 4th to ask for a modification. If a homeowner is facing foreclosure now, the action to take is to speak with a bankruptcy attorney about how you can protect your home from foreclosure.