Making Home Affordable Program FAQ's

Can Making Home Affordable help me if my loan is				later time. This is called a principal forbearance.
not owned or securitized by Fannie Mae or Freddie
Mac?				A portion of the debt could be also be forgiven. This is
				optional on the part of the investor. There is no
Yes. Making Home Affordable offers help to				requirement for principal forgiveness.
borrowers who are already behind on their mortgage
payments or who are struggling to keep their loans				Could I end up with a balloon payment?
current. By providing mortgage servicers with financial
incentives to modify existing first mortgages, the				Yes. If your servicer determines that a principal
Treasury hopes to help as many as 3 to 4 million				forbearance is required to get your monthly payment
homeowners avoid foreclosure regardless of who				to an affordable level, the amount of the forbearance.
owns or services the mortgage.				Say for example this was $20,000, would be
				subtracted from the amount used to calculate your
How do I know if I qualify for a Home Affordable				monthly mortgage payment, but you would still owe
Modification?				the money. You would have a $20,000 balloon
				payment that had no interest and was not due until
To apply for a Home Affordable Modification, you				you paid off your loan, refinanced or sold your house.
must:
				Is housing counseling required under this program?
Be an owner-occupant in a one to four unit property,
and have an unpaid principal balance that is equal to or				Borrowers, especially delinquent borrowers are
less than $729,750 (for one unit properties and higher				strongly encouraged to contact a HUD-approved
for two to four unit properties (consult your servicer),				housing counselor to help them understand all of their
				financial options and to create a workable budget plan.
Have a loan that was originated before January 1,				These services are free. However, housing counseling
2009.				is only required for borrowers whose total monthly
				debts are very high in relation their incomes, and it is
Have a mortgage payment (including taxes, insurance,				voluntary for others.
and home owners association dues) that is more than
31% of your gross (pre-tax) monthly income, and have				When you apply for a Home Affordable Modification,
a mortgage payment that is no longer affordable,				your servicer will analyze your monthly debts, including
perhaps because of a significant change in income or				the amount you will owe on the new mortgage
expenses.				payment after it is modified, as well as payments on a
				second mortgage, car loans, credit cards or child
If you answered YES to all of these questions, you				support. If the sum of all of these recurring monthly
are eligible to apply for a Home Affordable				expenses is equal to or more than 55% of your gross
Modification. Only your servicer will be able to tell you if				monthly income, you must agree to participate in
you qualify.				housing counseling provided by a HUD-approved
				housing counselor as a condition of getting the
What if I don't qualify or my lender is not participating in				modification.
the Home Affordable Modification Program?
				I heard the government was providing a financial
While 3-4 Million Homeowners are expected to qualify				incentive to borrowers. Is that true?
and most major lenders are expected to participate, in
the event you cannot participate in this program, we				Yes. Borrowers who make timely payments on their
are an ethical, full service Loss Mitigation firm dedicated				modified loans will receive success incentives. For
to helping homeowners retain their homes. Contact us				every month you make a payment on time, Treasury
today at 1-877-467-3588.				will pay an incentive that reduces the principal balance
				on your loan. Over five years the total principal
Do I need to be behind on my mortgage payments to				reduction could add up to $5,000. This contribution by
be eligible for a Home Affordable Modification?				the Treasury will help you build equity faster.

No. Responsible borrowers who are struggling to				I do not live in the house that secures the mortgage I'd
remain current on their mortgage payments are eligible				like to modify. Is this mortgage eligible for a Home
if they are at risk of imminent default, for example,				Affordable Modification?
because they have had or will soon have a significant
increase in their mortgage payment that they cannot				No. For example, if you own a house that you use as
afford. If you have had or anticipate a significant				a vacation home or that you rent out to tenants, the
increase in your mortgage payment or have had a				mortgage on that house is not eligible. If you used to
significant reduction in income, contact your servicer. If				live in the home but you moved out, the mortgage is
you meet the minimum eligibility criteria for a Home				not eligible. Only the mortgage on your primary
Affordable Modification, your servicer is required to				residence is eligible. The mortgage servicer will check
evaluate your loan to see if you are at risk of imminent				to see if the dwelling is your primary residence.
default.
				I have a mortgage on a duplex. I live in one unit and
I have missed some mortgage payments am I eligible?				rent the other. Will I still be eligible?

If you answered yes to the questions above, have				Yes. Mortgages on two, three and four unit properties
missed two or more mortgage payments and your				are eligible as long as you live in one unit as your
servicer is participating in the Making Home Affordable				primary residence.
Program, your servicer must evaluate your loan to
determine if you qualify for a modification.				I have two mortgages. Will a 2009 Obama Mortgage
				Relief Plan reduce the payments on both?
I have a second mortgage. Am I still eligible?
				Only the first mortgage is eligible for a modification.
Yes, but only the first mortgage is eligible for a
modification under Making Home Affordable Loan				I owe more than my house is worth. Will a Home
Modification Program. Any negotiations on the				Affordable Modification reduce what I owe?
second mortgage would be between you and your
lender and does not affect the federal guidelines.				The primary objective of the Making Home Affordable
�				Program is to help borrowers avoid foreclosure by
How do I know if my servicer is participating? Are all				modifying troubled loans to achieve a payment the
servicers required to participate?				borrower can afford. Investors may, but are not
				required to, offer principal reductions. However, it is
Servicer participation in the program is voluntary.				more likely that your servicer will use interest rate
However, the government is offering substantial				reductions in order to make your payment affordable.
incentives to servicers and investors, and it is
expected that most major servicers will participate.				I have an FHA loan. Can it be modified under the
Participating servicers will sign a contract with				making Home Affordable Program? Are all loans
Treasury's financial agent, through which they agree to				eligible?
review every potentially eligible borrower who calls or
writes asking to be considered for the program. As				Most conventional loans including prime, subprime,
contracts are signed, a list of participating servicers will				adjustable, loans owned by Fannie Mae, Freddie Mac,
be available on the Internet at Participation will be				private lenders and most loans in mortgage backed
mandatory for any servicer that accepts future				securities are eligible for a Home Affordable
funding from the Treasury's Financial Stability Program.				Modification. The Administration is working with the
				Congress to enact legislation that will allow FHA, VA
				and USDA to offer modifications consistent with
What will my servicer do to determine if I qualify?				Making Home Affordable in the near future. Currently
				loans insured or guaranteed by these agencies are
Your servicer will:				being modified under other programs that also enable
				borrowers to retain homeownership.
Determine that your loan meets the minimum eligibility
criteria (owner occupied, originated before January 1,				What should I do if my servicer tells me that the
2009, UPB equal to or less than $729,750). If yes:				"investor" is not participating in Making Home
				Affordable?
Obtain sufficient income information to determine if
your monthly mortgage payment is more than 31%				As contracts with servicers and investors are signed,
(approximately 1/3) of your gross or pre-tax monthly				the list of participants will be posted at Borrowers
income. (Your servicer may initially accept verbal				should first check there to see if their servicer is listed.
information about your income, but eventually you will				If so, you should call your servicer back and ask to
need to provide proof of income in the form of tax				speak to a supervisor or you may contact a
returns and pay stubs). If yes:				HUD-approved housing counselor for assistance. If
				your servicer is not participating in the program, you
Add past due charges (interest, taxes, insurance and				should ask your servicer or a housing counselor about
costs that your lender paid to other parties on your				other workout options that may be available.
behalf - but not late fees, those must be waived) to
the loan balance.				I'm already working with my servicer or a housing
				counselor on a loan workout. Can I still be considered
Determine how much of an interest rate reduction will				for a Home Affordable Modification?
be required to get your mortgage payment down to a
point where it is about 31% of your gross monthly				Yes. You should ask your servicer or counselor to
income.				explain the benefits of all available foreclosure
				prevention or payment reduction options. A Making
Apply a test to determine if the cost of the				Home Affordable Modification is one of many valuable
modification (including the government's incentive				tools available to your servicer. Other options may be
payments) is less costly for the investor than a				more appropriate for your situation.
foreclosure. If yes:
				How do I apply for a modification under the
Put you on a trial modification for three months at the				Homeowner Affordability and Stability Plan?
new interest rate and payment.
				If you meet the general eligibility criteria for the
If you successfully make the payments and are				program, you should gather the financial documentation
current at the end of the trial period, your servicer will				that your servicer will need to determine if you qualify.
execute a permanent modification agreement that will				Once you have this information, you should call your
lower your interest rate to a fixed rate for five years.				mortgage servicer and ask to be considered for a
				Home Affordable Modification. The number is on your
The modification payment will also include a monthly				monthly mortgage bill or coupon book.
amount to be set aside (escrowed) to pay taxes and
insurance when they become due. This escrow is				If your loan is current, please be patient. Treasury just
required even if your prior loan was not escrowed.				published detailed program requirements on March 4,
				2009 and it will take some time before servicers are
What happens after five years?				fully operational. However, the Treasury has
				encouraged servicers to immediately begin reviewing
If the modified interest rate is below the market rate,				the eligibility of delinquent borrowers that are at the
the modified rate will be fixed for a minimum of five				greatest risk of foreclosure.
years as specified in your modification agreement.
Beginning in year six, the rate may increase no more				If you have already missed one or more mortgage
than one percentage point per year until it reaches the				payments and have not yet spoken to your servicer
rate cap indicated in your modification agreement. The				call them immediately.
cap is equal to the prevailing market interest rate on
the date the modification is finalized as published by				What information and documents will I need?
Freddie Mac based on a survey of its customers. This
cap means that your rate can never be higher than				It will help your servicer and speed processing of your
the market rate on the day your loan was modified. If				application if you gather the some information and
the modified rate is at or above the prevailing market				documents before you call. You will need:
rate, the modified rate will be fixed for the life of the
loan.				Information about the monthly gross income of your
				household, including recent pay stubs if you receive
How low can my interest rate go?				them or documentation of income you receive from
				other sources.
Treasury is providing incentives to your investor to
write the interest down as low as 2%, if necessary to				Your most recent income tax return.
get to a payment that you can afford based on your
income.				Information about your assets

What happens if that is not enough to get to an				Information about any second mortgage on your
affordable payment?				house.

If a 2% interest rate is does not result in a payment				Account balances and minimum monthly payments
that is affordable (31% of your gross monthly income),				due on all of your credit cards.
your servicer will:
				Account balances and monthly payments on all your
First try to extend your payment term. At the				other debts such as student loans and car loans.
servicer's option your payments could be extended
out to 40 years.				A letter describing the circumstances that caused your
				income to be reduced or expenses to be increased
If that is still not sufficient your servicer will defer				(job loss, divorce, illness, etc.).
repayment on a portion of the amount you owe until a

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Making Home Affordable Program FAQ's