“More Changes to the Stimulus Package Loan Options”

The loan modification options have changed once again so we are providing you with an update of the most recent options below in the form or frequently asked questions. Please note that this is a different provision from the HAP (Homeowners’ Assistance Program) written specifically for Military Homeowners. The program options noted below are applicable to all homeowners and may in fact be more beneficial to our Military Families than the Military specific HAP.

What are my options under the Stimulus Package that went into effect March of 2009?

If your mortgage is held by Fannie Mae or Freddie Mac then you have the option of REFINANCING your home through the Home Affordable Refinance Plan. This plan allows you a 105% loan to value on your first trust based on your current appraised value. Please note that at this time, this program does not allow you to roll the second trust into the first. Please stay tuned for possible changes on this. Note, financial distress, such as a job loss / income reduction, is not prerequisite to qualify for the refinance.

Or

If you have had a change in your circumstances since you purchased the home (such as a job loss or reduction in income), or your loan is an adjustable rate, or your payment has gone up, you may qualify for a LOAN MODIFICATION through your current mortgage servicer. Note that it does not have to be a Fannie Mae or Freddie Mac loan to qualify. You should contact your lender directly or go to their website to obtain a list of documentation that you need to complete the application for loan modification.

How can I determine if my loan is owned by Fannie Mae or Freddie Mac?

Go to the following web sites and follow the prompts.
https://ww3.freddiemac.com/corporate/
http://loanlookup.fanniemae.com/loanlookup/

My loan is owned by Fannie Mae, what do I do?

You can call your current servicer or contact any other bank or broker to handle the refinance of your loan.
My loan is owned by Freddie Mac, what do I do?
If your current servicer is Wells Fargo, then any mortgage broker (choose wisely!) can handle your refinance. If your loan is serviced by any other company, you will need to contact them directly for the refinance.

Can I include my 2nd mortgage in the refinance?

No. The plan currently does not allow for you to refinance your 2nd. The plan only allows for you to refinance your 1st mortgage. We will update this if it changes.

Do I have to qualify for the refinance like a standard loan?

Yes, you will have to submit pay stubs, credit and asset information. If you feel that you will not qualify for the refinance based on your current income, contact a loan officer to find out. If you don’t qualify for the refinance, then you need to apply for the Loan Modification with your current servicer.

I don’t understand the 105% loan to value on the first trust, with unlimited loan to value on a combined 1st and 2nd trust. What does it mean?

Here is an example.
Your 1st mortgage is $300,000 and your 2nd mortgage is $50,000 with a current appraised value of $290,000. That gives you a loan to value of 103% on the first, with a combined loan to value of 116% including your 2nd mortgage. This is allowed by the program guidelines, but note that it does not allow actually rolling the second into the first on a refinance.

Can I roll in my closing cost or do I have to pay them out of pocket?

You can roll the cost in as long as the new mortgage amount doesn’t exceed the 105% first trust loan to value maximum.

I lost my job but have been able to make my payments on time so far, do I qualify for any help?

Yes. You need to contact your current servicer and tell them you want to apply for a LOAN MODIFICATION THROUGH THE STIMULUS PLAN. Tell them there has been a change in circumstance to your income and need assistance to lower your payment. YOU DO NOT HAVE TO BE BEHIND ON YOUR PAYMENT OR HAVE HAD A LATE PAYMENT TO QUALIFY.

I called my current servicer and they said there was nothing they could do, what now?

They may not understand the new guidelines. Call them back. Tell them you need the information to apply for a loan modification as you intend to apply for one. Don’t accept “no” for an answer until your package has been reviewed. Remember, it doesn’t cost you other than time to apply so even if they say no the first time, try again.
If you think the lender doesn’t understand the program, you can contact Fannie Mae by phone at 1-800-7FANNIE (8am – 8pm EST) or email to resource_center@fanniemae.com
Or Freddie Mac at www.freddiemac.com

We will continue to update the VR SAM’s Forum with changes to these programs, so continue to check there for updates. And as always, please feel free to call or email me directly with any questions.

Sincerely,
Susan Wallace
Mortgage Loan Specialist
Jacob Dean Mortgage
571-283-1337 Phone
www.LoansBySusan.net

Thanks for the good information!

Just an FYI:

In a severely depressed market where one is upside down by MORE than 105%, this really doesn't help in any way.

We are upside down over 120K on our home. We called to ask the bank to rework our loan since we are PCSing and since our house is valued at only 100K (we bought for 250K), they basically laughed at us.

So, just an FYI that this may not help very many people or will help just those who are very minimally upside down. Again, probably not likely to assist someone who is at risk of actually loosing their home.

Modifiying your loan MAY be an option as long as your debt to income ratio due is within a certain value (which you will have to apply for through your bank). Again, this may only help a few people who are PCSing.

Good luck everyone! smiley

Dear Anon,

We agree completely! For the past 18 months, every government program from loan modifications to the HAP have had numerous loopholes, implementation problems, etc. that have made them minimallly effective. I have tried to cover my cynicism in my notes / thoughts but undoubtedly it leaks through. While our primary focus is on Military Families and those programs specific to them, the reality is that alll of these programs are weak at best.

One can certainly make a good argument that some folks made bad decisions and should suffer the consequences. However, when it comes to Military Families, they are ordered to move by the government and in a very real sense, the move is a condition of their continued employment. From a legal point of view, a refusal to move could make them subject to legal action under the Uniform Code of Military Justice if they had not completed their obligated service.

Thus we believe they are a clear exception to any such argument! We believe that the general population would agree that covering these "employment costs" is the right thing to do and find it unconscienable that our government doesn't get it!

I am probably crossing some lines here, but believe strongly that every Military Member, Families, Friends, etc. should demand from their Congressman / Senators that this is fixed.

Thanks for your continued participation on this forum and we certainly wish you and family the best. Joe