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Mortgage & Housing Market News from HSH.com
March 6th, 2009 (Modified on January 30th, 2013)

Update1: Clark Howard Simplifies “Making Home Affordable” Plan



Update1 (02/02/10): This post has received a lot of comments from readers who are frustrated over the lack of communication between borrower and servicers. The Treasury recently made some mandatory changes to HAMP that are designed to improve servicer-borrower communications.

Click here to read our post titled “Changes to HAMP: Docs Required Upfront,” and share your experience by leaving us a comment.

Original post (published on 03/06/09): With all the executive summaries, Q&As, fact sheets, and guidelines, it’s easy for borrowers to get lost when dissecting all the text that has accompanied the president’s Housing Affordability and Stability Plan (HASP) in order to see if they qualify.

Clark Howard has gone the opposite route, dividing the qualifications for the “Making Home Affordable” plan into two categories:  late borrowers, and current borrowers:

If you can not afford payments and can not refinance for whatever reason, you will have the opportunity to have your loan temporarily reduced to 31% of your monthly income. This applies to homes valued at up to $759,750 in most areas of the country. Your interest rate may drop to as low as 2% for the next 5 years!

Under the second scenario, those who are current on a mortgage held by Fannie Mae or Freddie Mac will also be allowed to refinance — as long as they’re not more than 5% upside down in their home. (Note: This does not include a second mortgage). The new loan you’ll get will likely be re-written to an interest rate of around 5.125%.

And you may also be eligible for assistance even if your loan is not with Fannie or Freddie. That’s up to your individual lender, so get in touch with them to find out if you qualify.

Another aspect of the mounting housing plan that could impact late borrowers is the mortgage cramdown. Pending a vote in the Senate, the cramdown would allow bankruptcy judges to reduce a borrower’s mortgage debt.

103 Responses to “Update1: Clark Howard Simplifies “Making Home Affordable” Plan”

  1. Wendy Says: January 7th, 2012 at 1:16 am

    p.s. by “buy” (above), I mean cough up all the dilinquent mortgage payment plus the applicable late & attorney fees. I’m not suggesting bribing attorneys…

  2. Angela Says: January 12th, 2012 at 8:12 pm

    Wendy, We went through everything you went through but were eventually approved for a mod with BOA. It is such a stressful process and if my husband wasn’t laid off at the time I don’t know how we would have had time for it. It was his full-time job for about 8 months. Our new payment is about $500 less a month but we are still struggling and was reading these posts in hopes of finding an answer to my question. Can we refinance after getting approved for a loan modification?

  3. Robert Says: March 13th, 2012 at 6:06 pm

    Bank go America what a joke. I had brain surgery in June 2010. I knew I was going to fall behind by September of that year. I ha originally asked for a forbearance. I received a letter from them denying the forbearance but offering the HMAP. I was told I was qualified for that but it took until Oct.24th, 2010 before I got the temporary documents. I paid the temporary payments for 6 months straight far more than the required 3 months. At the end of April 2011, I received my final permanent papers. After notarizing them I FedEx the back. In two weeks I received a FedEx letter stated I was missing a document and I no longer qualified. I knew I had sent them all because I copied the documents I sent. I called them and resent my documents notarized again. I have been waiting for the modification to close since then. I am now 14 months passed due. Now they tell me I may not get it due to being so far behind. Every doors has been closed as far as getting any help from HUD since I did have a FHA loan. It has been the worst thing I have ever gone through. No compassion from Bank of America. It seems they have the government in their back pocket. God is my only help now.

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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