Clark Howard Simplifies “Making Home Affordable” Plan
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.
March 7th, 2009 at 7:14 pm
I found two things I think you’ll find valuable in doing the eligibility calculation. I found a site where you can plug in your mortgage info and some other numbers and you get a result as to which plan you qualify for or don’t qualify for and what incentives you might get. There was a ton of crap websites and the Treasury guidelines are helpful but I think a little ambiguous, at best.
I found out I’m not eligible for either program, because I’m not at risk and have more than 20% equity in my house but for other people who want to see if they are eligible, this could be useful:
http://www.homeaffordplan.com
March 9th, 2009 at 12:39 pm
Jim,
Thanks a bunch for sharing that info. How did you find that site? Are there any sites like this one that are sponsored by the White House — if not there probably should be. Thanks again, I’ll definitely be checking that site out.
-Tim
March 11th, 2009 at 12:52 am
[...] Clark Howard Simplifies “Making Home Affordable” Plan (hsh.com) [...]
March 16th, 2009 at 3:23 am
Hi Everyone,
The homeaffordableplan link above is spam, so don’t bother, god I hate those. Took some research but try these websites. Together they seem to cover it all.
If your loan is held by Freddie or Fannie, you might qualify for a refi or loan mod.
First, find out if your loan is held by Fannie or Freddie. Contact them here to find out. They give you the phone number to call Fannie and Freddie directly to see if your loan is held by one:
http://www.financialstability.gov.
For an idea whether you even qualify, even if your loan is held by Fannie or Freddie, you can calculate your eligibility here:
http://www.making-home-affordable.com
I’d also call HUD. I don’t have their number but you go to:
http://www.hud.gov
And last but not least is MortgageBreakDown, in my opinion one of the best new mortgage sites for independant information available. Easy to read, navigate and contains solid information:
http://www.mortgagebreakdown
March 19th, 2009 at 6:45 am
I think I’ll have to write my own blog about the Making Home Affordable program someday soon. On one hand I really think the country needs it badly, since so many people are losing their homes or near foreclosure. However, on the other hand I’m not completely convinced on how it will work and if it will work. I hope it does, though.
March 19th, 2009 at 11:25 am
Hello Imee,
I think most people will agree with you. We are all balancing the fact that something must be done to improve the housing market, but is what Washington plans to do going to be the right or effective thing to do? So far the Fed’s plan to purchase billions in Fannie and Freddie mortgage-backed securities has worked the best. It has put a steady downward pressure on rates.
Good luck with the blog if you decide to start one,
Tim
March 24th, 2009 at 2:15 pm
This site is unusually helpful on the topic of loan modifications, since other information online (in many cases direct from the U.S. Treasury and related websites) is on-point but still either biased towards hyper-technical readings of the Plan or a watered-down version intended for an uneducated public. I also found a site HomeAffordPlan.com which seems to bridge the gap! The calculator on HomeAffordPlan.com is superior to the Treasury Dept’s calculator on their new consumer website.
1) The government calculator does not give an analysis based on the persons specific financial situation. The calculator at homeaffordplan does, and does so for free without asking for identifying information.
2) The government calculator does not mention the incentives available to the borrower of the $1500 payment and a $5000 reduction in principal.
3) homeaffordplan results alert users if they will be required to undergo credit counseling in order to participate in the program.
March 31st, 2009 at 3:49 am
What I like about the Making Home Affordable plan is that it not only helps, it’s easy to understand. Even without Clark Howard’s approach, I already found the program simple and possibly highly effective. I hope it does work out–people can’t lose their homes especially during the recession.
March 31st, 2009 at 10:44 am
Imee,
Good to hear from you again. I agree, and millions of other Americans do too — we would all love for this program to help curb the current housing crisis. But your words “possibly highly effective” say it all. We’ll have to wait and see if it can help as many Americans as they say.
Thanks for your comment,
Tim
April 11th, 2009 at 3:28 am
I have read a few of your posts and they are all interesting and informative…keep up the good work.
May 30th, 2009 at 9:39 pm
[...] Clark Howard Simplifies “Making Home Affordable” Plan (hsh.com) [...]
June 6th, 2009 at 5:50 am
great work. I think these plans are great service for people during recession.
June 8th, 2009 at 12:12 pm
Thanks Karma
June 9th, 2009 at 8:35 am
Making Home Affordable, apparently another govt. scam. I first called my mortgage co. – Bank of America – on 3/12. Was told I qualified, but they weren’t set up for the program yet. Was told to call back in two weeks. Now, 3 MONTHS and 6 PHONE CALLS later, I’m still being told Bank of America still not set up for program, and to call back again. Meanwhile, the financial hole I’m in is getting deeper and deeper. I’ve never been late with a payment, but if I don’t get the promised help soon I’ll have to walk away from my home. My wife and I are 69 years old and only income is soc. sec. Our bills and credit card debt are piling up. Can’t hold on much longer. HELP!
June 9th, 2009 at 12:28 pm
Wm.,
While the program isn’t a scam, banks have seemingly shown little interest in participating. “Foot dragging” has been a real problem in the industry. I know it’s a hollow assurance, but you’re not alone. What caused you and your wife to begin going under in the first place? The rising number of defaults sweeping the country are from once qualified “prime” borrowers who have been swept up in unemployment and falling home prices.
Be persistent, keep calling, keep emailing, and don’t give up.
Best of Luck,
Tim
June 25th, 2009 at 10:39 pm
Hi,
We have just added your latest post “Clark Howard Simplifies “Making Home Affordable” Plan” to our Directory of Home Loan . You can check the inclusion of the post here . We are delighted to invite you to submit all your future posts to the directory and get a huge base of visitors to your website.
Warm Regards
Homeloa-n.info Team
http://www.homeloa-n.info
June 26th, 2009 at 9:25 am
Kevin,
Thanks, we’ll be looking into it.
-Tim
July 22nd, 2009 at 6:49 pm
WM. Ceins & who ever else cares to read this post,
I disagree with Tim. BoA (especially if you were previously with Country Wide) IS just one of many lenders ‘dragging their feet.’ They won’t, however, crack under the pressure of being called multiple times! That is a waste of your time that will likely result in your rage. They are all following the same runaround crap that you have been put through. This ‘call your lender directly’ bologna is a crock! It is a business. Plain and simple! If they have loan professionals and attorneys on their side, shouldn’t you at least have an attorney check out the new mod papers you are about to sign, IF you even get that far?! That is how many people ended up in the position they are in with these crappy loans! Some are in this position b/c of financial loss/difficulties, but who can say that a lower interest rate wouldn’t help?!
The lenders are using a government program that helps THEM not the borrower. What? How can that be? Well, THINK people! Besides the fact that it is a voluntary program, it states in the ‘rules’ that the lenders can only modify a loan if it helps and protects them and their investors!!!! Hmm, the government protecting lenders…?! No Way! It is unheard of! HA! Again, I say, THINK! If you want it done right, no matter your situation, use an attorney. One that is legit-Research them! It isn’t the government’s job to do it for you! An attorney HAS to do the best they can for YOU and not the lenders; as it is spelled out in plain English in the coveted Making Home Affordable Plan that has helped 1, count it, ONE family since starting it’s ‘efforts’ to help those in crisis… even though it’s stipulations negate any chance for most borrowers in distress to get the help! Wonderful, huh.
Sorry about the rant, but, please! There are too many smart people out there for this to still be a problem. You think you can take on the lender for a modification on your own?! You may as well fight a divorce or a criminal case while you are at it. Do you really think that with all the crap lenders have pulled that this is going to be any better? You have NOBODY protecting you from getting into one of these famous predatory loans that are still being formed daily! Be smart and protect your self! Find a legit Attorney and check out their history, bar exam, etc… Then, suck it up and PAY THE MAN (or woman) you expect to be paid for your work right? Well, me to, and so do the lawyers! This is how the U.S. of A. works folks! The only problem with paying for a service is if you don’t get the service! THAT is a scam! Not a legit Mod Co or Lawyer asking to be paid to help you.
July 22nd, 2009 at 6:59 pm
Oh, and no, I am not an attorney… I DO work for a Loan Mod Company that is contracted by one, and we have some AMAZING results! We guarantee our work and have yet to disappoint any of our clients. Our fee is made in payments too, b/c… I dunno, we’re human! We know that the folks we are talking to aren’t in the position to pay it all at once.
There is to much on the line for us to do shady work. For example, getting disbarred, shut down and ‘put away’, so on and so forth.
Good luck to all those who are in need of help! I sincerely hope that you find it! I just cannot understand why there are so many who refuse to believe the facts. If you HAVE gotten a mod from the lender you are with, CONGRATS! I hope you are pleased with your results b/c you can’t modify or re-fi again for a year.
July 28th, 2009 at 12:50 pm
If you have any reasonable equity in your home DO NOT WASTE YOUR TIME. I lost my job in January and we burned through all our 6 months of savings. We started the Two Step process last April. We qualified and completed Step Two by making three trial payments on the modified amount. We signed documents agreeing to everything stipulated by the program in early June.
Two weeks ago, we were told that our modification had been declined because of the fact that we had some reasonable equity in our home.
The whole process is a waste of time and is just a “feel good” process for the Buffoons in DC.
July 31st, 2009 at 11:32 pm
Bernie: Same exact thing happened to us. After making our third trial pmnt w/ BoA under Making Home Affordable at $1000/mo savings we received our finalModification Agreement via Fed Ex today stating we did not qualify for MHA,but we did qualify for a new payment of $350 more than our original payment! Geeeez no thank you! See you later house and your $260K negative equity! None of this makes sense. We’re agreeing to pay our balance at a lower rate and longer term, but they rather foreclose and lose over $260k in a bank sale. I don’t get it!
August 3rd, 2009 at 11:33 am
Bernie,
We’re sorry for your difficulties. It seems like it was one big waste of time. So your mod was declined because you have even some equity in your home?
What are your options now?
-Tim
August 17th, 2009 at 10:21 pm
bank of america did a modification for us all they did was add on the late and missed payments to our exsisting loan which increased our monthly pament and if we dont pay by the end of the month they will start foreclosure I want to know how they are allowed to get away with with it after they said they would modify it. The houses where i live are selling for 55,000 therefore my house is worth nothing . They prefer to sell my house than to work with me
August 18th, 2009 at 9:48 am
Hello Brenda,
Thanks for commenting, sorry to hear of your frustrations.
First off, increased monthly payments are a very common outcome for loan modifications. At the end of the year last year, one in four modified loans resulted in a increased monthly payment. So, BofA practices weren’t illegal or deceptive, however frustrating. As you stated, BofA has allowed you to continue with your loan on the premise that you repay your late and missed payments. Despite falling delinquent, the bank has allowed you to stay longer than if they hadn’t modified.
Lastly, we don’t think your home is worth “nothing.” Granted home prices have fallen, and in some areas a lot, but homes have value beyond selling for a profit. We hope you’re able to make your payments so you can stay in your home.
Good luck,
Tim
August 24th, 2009 at 10:31 am
I have a question: I was told by my lender that I qualified for a refi. They then sent me paperwork for the loand mod. I called and they told me I didn’t qualify for the refi. Then, I read the apaperwork they provided me and as part of the mod. I am to send them my next 3 mortgage payments at a reduced rate for a “tiral period”. Okay. Then I read further along and they state that they will be reporting me asd delinquent on my mortgage to the three credit companies! I have never been late on my mortgage payments! Are they allowed to do this? I am livid!
August 24th, 2009 at 11:47 am
Karen,
I’m confused, are you refinancing or modifying your loan? The trial period is a part of the Federal mod process, and lenders should be reporting borrowers in the trial period as current, NOT delinquent — that may be an oversight by your lender.
Click here to read on blog post on this exact subject. Loan mods are hurting credit scores b/c lenders are reporting trial period borrowers as delinquent when they should not be.
For a place of reference, be sure to read the FAQs on MakingHomeAffordable.gov.
Hope this helped,
Tim
October 20th, 2009 at 2:37 pm
Making Home Affordable is one of the biggest government run scams ever foisted on the American People.
Making Home Affordable is the proverbial throwing the bone to the dogs. There’s no meat on it but it will keep them quiet.
Those who paid for the “elected” officials get bailed out, and the American people will be paying through their taxes for the bail outs but we get a bone in return, because there is no meat on it so we will still loose our homes with this farce of a program.
I am speaking from experience we have and still are going round the mill with this one. Actually more like chasing our tails.
After 6 months we have had three denials from Wells Fargo even though we totally qualify. Of course Wells Fargo says we don’t, they won’t explain why we don’t, they just say we don’t.
The lobbyist keep growing for the lenders by the thousands even though if I recall our elected President was going to clean that up, and not employ any of them in his term. Interesting how all the ones in charge of all these matters come directly from the financial institutions that have been bailed out (maybe he lied?).
A lawyer maybe the way to go, if you have the money iand we shouldn’t need a lawyer to get what is ours from our govrenment!
That money is extremely hard to come by, we are going to try HUD/FHA next I expect that will be exactly like the experience with Wells Fargo since this is all set up to benefit the banks, not us anyway.
In the long run I expect we will loose our home, empty out our IRA’s, in the process, our savings are already gone, and Wells Fargo will be happy as pie that they get to make even more money from our home, which we have been so faithful in paying every month and have keep it so nice for them.
Wells Farge can resell it and they can buy off more of our “elected officials in the 2010 elections.
And wow, what a deal I get to pay for that too.
Oh yeah, we contacted our elected officials their reply, contact your lender and work with them. They are so helpful!
And so here we stand still chewing on the bone.
October 20th, 2009 at 3:39 pm
CS,
So sorry to hear about your troubles. Here are a couple more blog posts of ours that you may find interesting and educational:
1. Making Home Affordable’s Impact on Foreclosure Sales
2. Are Loan Mods Destroying the Mortgage Industry?
3. Update2 State Housing Programs Gets A Boost
The third one is about the latest program introduced by the White House. The new “wrinkle” in the program says that borrowers can refinance into a state housing finance agency (HFA) loan. From the Treasury’s Fact Sheet (page 2): “The program may support up to several hundred thousand new mortgages to first time homebuyers this coming year, as well as refinancing opportunities to put at-risk, but responsible and performing, borrowers into more sustainable mortgages.”
Maybe that’s a new avenue to pursue. Check it out, let me know what you think.
Good luck,
Tim