Making Home Affordable

MAKING HOME AFFORDABLE REFINANCE FAQs

1.  I am current on my home mortgage. Can the Making Home Affordable Refinance help me?

Qualified homeowners who are current on their home mortgages but have not been able to capitalize on today's lower interest rates since their properties have diminished in value, might now have the chance to refinance. Through the Making Home Affordable Refinance Program, Freddie Mac and Fannie Mae will allow for the refinancing of home loans that they own or invested in mortgage backed securities.

2.  How do you know if you are eligible?

You might be eligible if:

• You are the primary owner occupant of a one - four unit home,
• The mortgage loan on your house is owned or securitized by Freddie Mac and Fannie Mae
• When you apply for the making home affordable refinance program, you must be current on your mortgage
• The amount you owe on your first mortgage loan must be about the same or slightly less than the current value of your house,
• You must have income sufficient to support the new mortgage payments

The refinance gives you a better chance of keeping the home long term.

Your making home affordable mortgage lender will give you a Good Faith Estimate (GFE) that includes the new interest rate, mortgage payment and the amount you will pay over the life of the loan. Compare this to your current loan terms. If however, it is not an improvement, the making home affordable refinance program might not be right for you.

You should also consider that refinancing from an adjustable rate mortgage to a fixed rate mortgage loan (or eliminating higher risk loan terms such as interest only payments, negative amortization loans or balloon payments) might also provide long term stability.

3.  How do I know if my mortgage loan is owned or has been securitized by Freddie Mac and Fannie Mae?

You should call your mortgage lender or servicer and enquire about the making homes affordable program.

Both Freddie Mac and Fannie Mae have established toll-free telephone numbers and a web submission processes to help make this data available. Borrowers will supply or enter information to check if either agency owns the mortgage loan. This information is not a guarantee of eligibility for the making home affordable refinance program, as other qualifying standards must also be met.

4.  I owe more than my home is worth. Do I still qualify to refinance under the Making Home Affordable Refinance Program?

Qualified mortgage loans include those where the first mortgage will not exceed 105% of the current marketplace value of the home. For example, if your property is worth $300,000, but you owe $215,000 or lower on your first mortgage you could qualify. The current value of your home will be discovered after you have applied for a making home affordable refinance.

5.  I have a first mortgage and a second mortgage. Can I still qualify to refinance under Making Homes Affordable program?

As long as the amount due on the first mortgage is less than 105% of the value of the home, borrowers with more than one mortgage loan might be eligible for a Making Home Affordable Refinance. Your eligibility will depend on an agreement by the mortgage lender that has your second mortgage to remain in second position, and on your ability to meet the new payment terms on the first mortgage.

6.  Will refinancing through the making home affordable program bring down my payment?

The objective of the Making Home Affordable Refinance is to allow responsible borrowers who have shown a commitment to making on time mortgage payments, the opportunity to get into a mortgage with payments that are affordable today and sustainable for the life of the loan.

Borrowers whose mortgage interest rates are much larger than the current market rate should see an immediate decrease in their payments. Borrowers who are paying interest only, or who have a low opening interest rate that will increase in the future, might not see their current mortgage payment go down if they choose to refinance to a fixed rate and payment. These homeowners could save a large amount over the life of the mortgage loan by avoiding future mortgage payment increases.

When you submit a loan application, your making homes affordable mortgage lender will give you a Good Faith Estimate (GFE) that includes the new interest rate and mortgage payment that you'll pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a making homes affordable refinancing might not be right for you.

7.  Will a making home affordable refinancing reduce the amount that I owe on my loan?

YES. The objective of the Making Home Affordable Refinance is to help homeowners get into loans which they can actually afford. Refinancing can reduce the principal amount you owe $5,000 over 5 years, the government will make 5 $1000 principle mortgage payments for you after each year of on time mortgage payments.

8.  Will I be able to do a cash-out refinance?

No. But, homeowners whose mortgage loans are owned or securitized by Fannie Mae might be qualified to finance all closing costs and receive a small amount of cash (2% of the mortgage amount, but not more than $2,000) through the making homes affordable refinance if there is enough equity. For homeowners whose mortgage loans are owned or securitized by Freddie Mac, transaction costs (not to exceed $2,500) such as the cost of an appraisal or title report, can be included in the refinanced amount.

9.  How do I apply for a Making Home Affordable Refinance?

You should call your servicer or mortgage lender and ask about the Making Home Affordable Refinance application process. You can get the number by looking on your monthly mortgage bill. Making homes affordable approved mortgage lenders and servicers are implementing the program now and it could take time before they are ready to process all applications. In the meantime, it will help your making homes affordable approved mortgage lender and speed up the application process if you gather some information and documents before you call.

In Addition, beginning April 4, 2009, borrowers whose loans are owned or securitized by Fannie Mae may also apply through any Fannie Mae approved lender. Nearly all major banks and mortgage brokers are approved to work with Fannie Me. Ask the mortgage lender you prefer if they are authorized to provide a Making Home Affordable Refinance.

10. What documentation will I need to refinance under the making homes affordable program?

• Tax stubs and any other income information about the monthly gross (before tax) income of all the borrowers on your mortgage loan.
• Your two most recent income tax returns.
• Information about any second mortgage on the house.
• Account balances and minimum monthly payments due on all of your credit cards, bring current statements.
• Account balances and monthly payments on all your other debts such as student loans and car loans, current statements.

11.  I am delinquent on my mortgage. Will I qualify for a Making Home Affordable Refinance?

No. Homeowners who are currently delinquent or have been 30 days overdue more than once during the past 12 months will not qualify. You should contact your servicer to see if a Making Home Affordable Modification might be an option for you.

12.  Will I need mortgage insurance under the making homes affordable program?

If your existing mortgage loan has private mortgage insurance, you will need the same amount of insurance coverage for the making home affordable refinanced loan. If your existing mortgage loan does not have private mortgage insurance it will not be required as part of the making home affordable refinance.

13.  How long will the Making Home Affordable Refinance be available?

The program is due to expires on June 10, 2010. Your refinance must be closed and funded on or before that date.