Making home affordable - 2% rate

[jdett]

I have been doing some reading on the internet about the Making Home Affordable (Obama) Program. First, the 105% refi has been extened to 125%. good news!! I have also been reading that you can also get a loan mod to a 2% interest rate. Both of these programs require that you have a freddie or fannie loan now and of coarse a hardship -- rate going up , loss of income......

Anyone have anymore on this or have obtained one of these loans?

[weneedhlp]

Through the MHA plan, if we cant afford the payment at the 31% of our income and we can afford the payment if our rate was 2%, will our lender let us go do to 2% to still comply with the MHA plan. Or is 31% the lowest payment allowed?

[ama125]

Originally Posted by weneedhlp

Through the MHA plan, if we cant afford the payment at the 31% of our income and we can afford the payment if our rate was 2%, will our lender let us go do to 2% to still comply with the MHA plan. Or is 31% the lowest payment allowed?

The goal of the MHA plan is to lower your payment down to as close as possible without going under to 31% of your gross monthly income. The process to reach this target is a three step approach called the standard waterfall.

Step 1 - reduce the interest rate to as low as 2% (this would be in place for the first five years, and gradually increase by 1% each year until the Freddie Rate is reached that was in place when the modification took place...the current Freddie Rate is 5.1% so that is what it would cap at)
Step 2 - extend the loan term to as much as 40 years
Step 3 - forbear principal (this is a portion of the loan that is deferred and bears no interest but is due as a balloon payment when the loan term is reached or the home is refinanced or sold).

If the goal of 31% cannot be reached through these three steps, then the loan mod would not satisfy the program requirements. If you are just looking for a 2% fixed, then by all means, ask your bank if this is workable for you.

[weneedhlp]

Ama,

thank you for the info. If we cant afford the 31% payment, and the bank says that they only do the MHA, do you have any suggestions as to who to go to and what to say to try for a lower payment? Once again, thank you

[ama125]

Originally Posted by weneedhlp

Ama,

thank you for the info. If we cant afford the 31% payment, and the bank says that they only do the MHA, do you have any suggestions as to who to go to and what to say to try for a lower payment? Once again, thank you

I've been trying for the MHA with BofA and I know for a fact that they do offer other mod programs. Who is your bank? I find it odd that they would ONLY do MHA. Try emailing the president of the bank's home loans division or contacting NACA for assistance. NACA will put together a restructure and submit it to the bank for approval. Most mods, however, will try to reach a payment that is within 31% of your income. You could also try for a forbearance agreement. This is a temporary reduction in payments (could be zero payments or up to 50% reduction in payments) and can vary from 3 to 6 months typically. When that period is over, they may consider you for a modification. You would have to do a little calculating to see if a 50% reduction in payment is something you could afford. Remember, there are no guarantees and even if you do get a forbearance or a mod trial, be sure to keep on top of things. There is so much confusion there that all too often, the foreclosure attorneys are never notified to cancel or postpone sale dates and borrowers are left scrambling to get the date lifted. Good luck!

[ama125]

Originally Posted by jdett

I have been doing some reading on the internet about the Making Home Affordable (Obama) Program. First, the 105% refi has been extened to 125%. good news!! I have also been reading that you can also get a loan mod to a 2% interest rate. Both of these programs require that you have a freddie or fannie loan now and of coarse a hardship -- rate going up , loss of income......

Anyone have anymore on this or have obtained one of these loans?

Only the refi (HARP) program requires Fannie or Freddie, the modification program (HAMP) can be for any participating servicer. Note that regardless, if Fannie or Freddie owns the loan, whoever the servicer is, they are required to participate for those loans for HAMP. There are loads of stories on here of people currently in the HAMP trial as well as tons of information on the programs (at least HAMP anyway).

[minknmelissa]

Ama I have been trying to get the mha mod but b of a won't seem to put it in for me. I sent naca an email and told them i really wanted them to look into mha for me. I have been submitted already they did come back with proposal but naca didn't agree to terms .