Will you qualify for mortgage help?
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So, the President has announced his mortgage rescue plan - sort of. More details are expected to be released in early March. Meanwhile, you can check out the fact sheet here.
The big question on everybody's mind is whether YOU will qualify for help. The short answer is simply nobody knows yet. Remember, this is only a proposal, and it's got a long way to go to get through Congress.
So what's in it right now? Well, according to the fact sheet, it has 3 goals: 1) affordability, 2) stability and 3) supporting low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac.
Under "affordability," the proposal talks about giving homeowners refinancing options in the face of falling equity. Sounds good, and allowing homeowners to take advantage of today's low interest rates would go a long way. The proposal, however, seems to be limited to people who took out conforming (i.e., not sub-prime) loans that are owned by Fannie Mae or Freddie Mac.
Under "stability," the administration proposes a $75 billion fund. The ideas here are more varied, and claim to target people who are "at risk" of falling behind. There are rewards to be paid for making payments on time - to the borrowers, lenders and servicers. What's not really clear is how they intend to identify those people "at risk" of falling behind. Aren't we all, at this point?
Finally, the administration's plan seeks to prop up confidence in Fannie Mae and Freddie Mac. Not much there for the homeowner directly.
So what do we make of all this? Stay tuned. There really is no telling right now what this will look like when more details come out early next month or when (or if) it gets passed by Congress. You can, however, count on our office to keep you informed of what's coming down the pike and how you can best use it to your advantage. We've handled loan workouts, sub-prime mortgage litigation and short sales and would be happy to consult with you about your particular situation. Our staff includes a former in-house counsel to a mortgage lender and we have access to a nationally-known expert on lending matters.