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Help TODAY With Your Refinance

The past 18 months of  the released stimulus package, an unprecedented act by any government to jump start a fledgling economy, has been successful from a global point of view.  However when you  look past the global and see beyond the micro to the macro stimulus effect, it is not as pretty to look at.

The launch of stimulus monies to support the toppled real estate economy has been a benefit to some, to others it is yet another way to capitalize on free money to increase equity in properties that have substantial long term value but in the current economy their value reflect much less, which is a skewed perception.

However, it is no benefit to the homeowner to hear, see and understand that there are some who are taking advantage of the stimulus package and abusing its true designated use. Especially today, when the everyday man and woman who are working fiercely to save their own domicile.

The introduction of the United States Government’s  “Making Home Affordable Mortgage Program” HARP/HAMP, was established to help people refinance existing mortgages, or do a loan modification that enables a homeowner to remain in their home.  The government’s website explains what the program is meant to do:

The Obama Administration’s Making Home Affordable Program includes opportunities to modify or refinance your mortgage to make your monthly payments more affordable. It also includes the Home Affordable Foreclosure Alternatives Program for homeowners who are interested in a short sale or deed-in-lieu of foreclosure.

About

In February 2009, the Obama Administration introduced a comprehensive Financial Stability Plan to address the key problems at the heart of the current crisis to get our economy back on track. A critical piece of that effort is Making Home Affordable, a plan to stabilize the housing market and help struggling homeowners get relief and avoid foreclosure.

The Home Affordable Modification Program provides eligible homeowners the opportunity to modify their mortgages to make them more affordable. Over one million homeowners have already gotten help under the program. The program is on track to offer help to 3 to 4 million homeowners by 2012.

On March 26, the Obama Administration announced expanded flexibility for mortgage servicers to assist more unemployed homeowners and homeowners who are underwater through the program.

The Second Lien Modification Program (2MP) offers homeowners a way to modify their second mortgages to make them more affordable when their first mortgage is modified under the Home Affordable Modification Program.

Can I Refinance Even If My Loan to Value Is Upside Down

Many have already started the process of refinancing their home through HARP, when just over a year ago they were unable to refinance because their Loan to Value (LTV) ratio on their house was significantly over the traditional 80%.  Under the Plan, these mortgages may qualify for refinancing, even up to 125% of the value of the home.

Are you Eligible for HARP

To be eligible for HARP your home must be currently mortgaged through the Fannie Mae or Freddie Mac. If your current Mortgage is a  Fannie Mae or Freddie Mac, then you must apply for refinancing that is Fannie Mae to Fannie Mae or Freddie Mac to Freddie Mac.

As of today, which is the latter 2010, since the major banks, and the few smaller banks that are still in business are so flooded with refinance applications many are insisting that they are only able to work with their current customers.  These borrowers which have acquired their mortgages over the past 12 or more years, now have the opportunity to apply for what may be a much lower interest rate.  Imagine no matter what business or service industry you are in, that you were faced with every customer from the past 12 years showing up needing your service in a compressed amount of time. What or who would be able to manage such instant over flooding of customers, expecting and some demanding instant gratification of their closed refinance.

SIDE NOTE: If the banks, especially the major banks who have managed for several years to maintain the requirements of their Charters, Stockholders and standards of regulations, which is way above the governments regulations, are able to assist the United States Government to stabilize the Real Estate and Mortgage business, then we  should tip our hats to their gallant effort.

How Do I Know Who Financed My Loan?

Before you go to the websites below, you can check your mortgage statement, or inquire with your service bank to find out what type of mortgage you have.

Note: Although your service may bank may be BANK A, but Bank A did not originate your loan, it is quite possible that they are only the servicing the loan, meaning that they may only be an accounting service employed by the original bank to collect your mortgage and service it and manage the escrow accounts.  Or, the original institution may be defunct or out of business.

If you are doing some due diligence and do not want to contact your mortgage bank, you can do a little research at the following websites.  I have included their numbers as well, however you may find that you are on  hold for a very long time as their lines are ringing off the hook. Imagine that!

• Fannie Mae’s Mortgage Search Form: Fannie has a larger market share, so check here first.  You can also call: 1-800-7FANNIE (8am to 8pm EST).
• Freddie Mac Mortgage Search Form:  If Fannie Mae isn’t showing your loan on their website, try out Freddie Mac to see if they back your loan. You can also call: 1-800-FREDDIE (8am to 8pm EST)

Am I Eligible For The Government Program?

To be eligible for the refinance you must meet these criteria:

• You are current on your mortgage payments.
• You have income to support the new mortgage payments.
• Your first mortgage does not exceed 125% of the current market value of the property.

FREDDIE MAC

• Documented income, two most recent pay stubs, W-2, and most recent tax return with signed IRS 4506-T.

• • IF your have only being paying an Interest Only Loan and are now moving to PITI-Principle and Interest with some banks requiring an escrow account for Taxes and Insurance, you will have to prove income validity.
  • While in application of  a refinance, you will have to provide bank statements, as you more than likely will have to have some money at the closing table.  While it may not be a large sum of money, your mortgage bank needs to ensure that you have the liquid assets needed to close and will not have to borrow those monies.
  • Sign an affidavit of No Loss of Job or Income reduction in the past 6 months.
  • If you have been divorced since you first originated your mortgage, you may need to provide not only your final judgment papers, but also proof that you have been making the payments on your own for the last 12 months.
  • Letters of explanation for any recent credit inquiries

Fannie Mae

With Fannie Mae, documentation is typically more cumbersome than with Freddie Mac, depending on your situation.

• • IF your have only being paying an Interest Only Loan and are now moving to PITI-Principle and Interest with some banks requiring an escrow account for Taxes and Insurance, you will have to prove income validity.
  • Before you apply gather every document that has financial information, bank statements, loans, income statements, check stubs, IRS tax returns, signed IRS 4506-T.  If you have received financial gifts from family that were deposited into your financial institution, you may need to provide documentation.
  • Sign an affidavit of No Loss of Job or Income reduction in the past 6 months.
  • If you have been divorced since you first originated your mortgage, you may need to provide not only your final judgment papers, but also proof that you have been making the payments on your own for the last 12 months.
  • Letters of explanation for any recent credit inquiries.

Try it out at the link below to due some investigation on your own. Just a word of encouragement, even if the answer is not positive at the end of the questionnaire, you have nothing to lose by applying for a refinance loan.  Laws and  requirements are changing faster than the information supplied by this website or other for the that matter. So go ahead get you feet wet and check out the link:

• HAMP or HARP

The Next Step – Refinancing Or Modifying Your Loan-HARP or HAMP

Now that you’ve determined that your loan is backed by Fannie or Freddie, and you’ve confirmed that you meet the eligibility requirements, what’s the next step?

First, you should get all of the following primary paperwork together before you call your Loan Officer, and ask about your eligibility under the HARP program. By being prepared you will be ready for your application appointment. The following is just the common financial statements that you will need:

• Information about all monthly gross income, including recent pay stubs if the borrowers are employed or pensioned.  Documentation of any and all income received from other sources.
• Most recent income tax return.
• Information about assets.  Bank Statements, Investment Portfolio-Insured properties or valuables.
• Information about any second or equity or line of credit (LOC) mortgage on the house.
• Account balances and minimum monthly payments due on all forms and types credit in addition to credit cards. All account balances and monthly payments on all other debts such as student loans and car loans.  Also if your income is adjusted (plus or minus) for child support payments, documentation will be needed.

Finally, you should call your mortgage lender and ask about the HARP or Loan Modification application process, or begin your refinance application online with your lenders online services. If they do not offer that service online you will be able to get their telephone number for customer service. Once you enter the process, be patient as mortgage lenders are receiving an over abundance of applications, and it may take up to 120 days, depending on the financial institution to finalize your application to a new loan.

Disclosure: While this site has great information that you can use, it is important to note that WE are NOT responsible for any action that you may make based solely upon this website. We are here for informational purposes only. While the information given is based upon the resources of the posting date, and any or all information found here may change, due to economic or political events. Meaning everything is changing faster than any one website is able to keep up with, so what may be pertinent today may in fact be antiquated tomorrow.