Some Help Is Better Than Nothing

I was waiting for the Obama Administration to unveil their "Making Home Affordable" program.

I was hoping that it would help the millions of homeowners that are out there who need help to save their home.

I was hoping that this new program would not end up like the old programs that sounded good but in truth did not really help anyone.

I was hoping the homeowner didn't have to rely on their mortgage servicer to give them help.

Well like the old saying says: "I have some good new and some bad news".

According to the U.S. Department Of The Treasury, Making Home Affordable will offer assistance to as many as 7 to 9 million homeowners to make their mortgages more affordable.

There are 2 parts to the plan:

The Home Affordable Refinance program will be available to 4 to 5 million homeowners who have a good payment history on an existing mortgage owned by Fannie Mae or Freddie Mac. The issue with so many homeowners is that they are upside down. In other words, they owe more than the house is worth. Under the Home Affordable Refinance program, many of these home owners will now be eligible to refinance their loan and take advantage of today's lower mortgage rates and what is really big, convert an adjustable rate mortgage into a more stable fixed rate mortgage.

Many lenders already have the information on these borrowers on file, so documentation requirements shouldn't be out of hand. And in some cases, an appraisal may not be necessary, which will save the homeowner some costs. This will result in a quicker and less costly refinance.This program ends in June 2010.

The Home Affordable Modification program will help up to 3 to 4 million at risk homeowners avoid foreclosure by reducing their current monthly mortgage payment. Loan servicers can begin immediately to modify eligible mortgages under the Modification program so that at risk borrowers can better afford their payments. (This assumes that servicers are willing to modify the existing loan in the first place.) That was the problem with the old "Hope For Homeowners" program, it was hopeless and it didn't help anyone.

The Home Affordable Modification has eligibility and verification requirements so not everyone will be able to use this program.

Like I said in the beginning, some help is better than nothing. This is still too new to determine how effective this will be. I'm sure there will be some bugs that have to be worked out.

But what I don't see is all the media experts, print and television, applauding this program like it is the answer to all our problems. They all seem confused and uncertain what the long term results will be.

I'm hoping their confusion and uncertainly clears up.

And fast.


If you have any comments on this article, I would love to hear what you have to say!

Feel free to comment below.Thanks for reading!

Dan Tenchall
Great Lakes Mortgage Funding

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