Photo by bhautikjoshiWhat does it do?

This program works hand in hand with HAMP’s loan modification program. It is designed to help homeowners that are struggling to meet their mortgage payments because of a second mortgage on their home. The 2MP program helps homeowners reduce the payments on their second mortgage or even get rid of it altogether. 2MP does this by providing lenders with incentives to reduce interest rates, extend the term of the second mortgage to 40 years, or forgive a portion or the entire loan.

Eligibility

To qualify for a Second Lien Modification Program (2MP):

-       Your first mortgage must already have been modified under HAMP (see program 1 above).

-        The lender of the second mortgage must also be taking part in the Making Home Affordable Plan (i.e. Bank of America, Citi Mortgage, Chase, Wells Fargo and their subsidiary companies).

-       The second mortgage must have started before January 2009.

-       The mortgage must have a balance of more than $5,000 and monthly payments of more than $100.

Used in combination with an HAMP loan modification a 2MP second lien modification could significantly reduce your monthly mortgage expenses. Click here to find out if you qualify.

Is Obama’s Mortgage Assistance Reaching You

President Obama’s mortgage relief program is now reaching 20% of those eligible for the program, or 650,000 borrowers, according to a new government report. More than 650,000 people have signed up for trials that will last at least five months, according to the Treasury Department for the program that had a slow beginning. As of last month, 16% of eligible homeowners had been reached with the program. Homeowners must be at least 60 days behind with their payments to be eligible.

Under modifications with the program, monthly payments will be reduced to an affordable amount–no more than 31% of a borrower’s pre-tax income. The president’s mortgage relief program began in March, but not many people applied at first. As of now, however, 920,000 loan modification offers have been given to about 3 million eligible homeowners. That is a total of 29 %. As of the end of July, offers had been made to only about 15% of eligible homeowners.
About 130,000 eligible California homeowners are enrolled in the “Making Home Affordable” loan modification program. President Obama introduced the program in February. Of the homeowners who were in foreclosure or two payments behind in the state, about 19% have enrolled.

Other states that have been hard hit by real estate problems have a similar amount of residents involved in the program. Arizona has 22% of eligible residents enrolled, Nevada, 18%. The number of people involved in Florida, 12% is much lower. Some believe that may be because a high number of investor owned homes did not qualify. The program is a $50 billion program.

Many housing advocated are still disappointed with the number of people who have signed up for the trials under the program. Government officials are pressing industry officials to improve performance. Many people have claimed that financial institutions lose their paperwork, transfer them repeatedly between departments, and ask them to fill out applications over and over.
Many economists are skeptical that President Obama will achieve his goal of reaching three to four million borrowers with the program within three years.

Those interested in President Obama’s mortgage relief program must complete a huge stack of paperwork to apply. They must also show they can make their payments on time. According to RealtyTrac, an online marketer of foreclosed homes, 937,840 homeowners filed for foreclosure in the third quarter of this year. Some housing counselors say the number of people being assisted by President Obama’s program is not nearly as high as the number of people being foreclosed upon.

John Taylor, head of the National Community Reinvestment Coalition says the president’s plan is “lagging behind” the number of foreclosures. Administration officials, however, say the program is on track.

Will the government mortgage help plan stabilize the housing market Obama has some new sweeping government mortgage initiatives that will assist new home buyers and help those whose mortgages are more than they can currently bear financially. The broad spectrum hopeful fix will use money from the government to help subsidize the rates and assure that the lenders don’t fall prey to the falling prices of homes.

The plan, about 75 billion dollars worth, has several facets and will allegedly assist about 9 million borrowers who are suffering from the falling prices of homes and monthly payments that are astronomical in nature. The foreclosure fix is a steep departure from that of the Bush era politics which relied for the most part on having the lender modify their rates for mortgages that were in trouble. Obama’s plan, it is said will make it easier for the home owner to afford their monthly payment by refinancing the mortgage,as well as putting in billions of federal dollars into tempting those companies to modify the loads of the people who have already stopped their mortgage payments nationwide. IT is being said the program, while voluntary in nature, contains a mingling of both carrot and stick, temptations for the loan servicers and investors, as well as offering a big stick on the guise of working with Congress to permit judges to modify the mortgages of those who do fall behind before the borrower has lost their home. This is a step that the community believes is a good step toward assisting home owners financially to keep their equity in their home, but is not well received by the financial community.

Obama, in a speech in Mesa Arizona, a community which has been quite hard hit by the financial and mortgage issue. . . “In the end, all of us are paying a price for this home mortgage crisis,” Obama said. “And all of us will pay an even steeper price if we allow this crisis to deepen — a crisis which is unraveling homeownership, the middle class, and the American Dream itself. But if we act boldly and swiftly to arrest this downward spiral, every American will benefit.” The act, which is being hailed by Democrats could conceivably reduce the numbers of people who are losing their homes, but with strict limitations, could also be problematic. The Republican party however decries the cost of the bailout, saying it will cut into the pocket of every man woman and child in America.

Obama Administration Rescues Homeowners

With bills piling up and wages staying the same or decreasing, homeowners are wondering where to turn.  Thankfully, the Obama administration has come to the rescue with loan modification and refinancing programs.  Lenders and borrowers have new incentives as Obama races to stall the flood of foreclosures.

To determine if you are eligible, you can go to their website, MakingHomeAffordable.gov, which asks you a few questions.  The goal of the Obama administration is to help 7 to 9 million people reduce their mortgages and save their homes from threat of foreclosure.  The two main programs are the Home Affordable Refinance Program and Home Affordable Modification Program.

The Home Affordable Refinance Program provides assistance to up to 4 to 5 million homeowners which are owned by Fannie Mae or Freddie Mac.  It allows them the chance to refinance their homes to bring down the cost of their monthly payments.   It can also help by changing the homeowner from a risky adjustable rate mortgage to a more stable one.

The Home Affordable Modification Program has set aside $75 billion with the intention of helping millions of Americans avoid foreclosure.  A borrower participating in this program will find plenty of incentives to keep payments current.  For example, a borrower can get up to $1,000 pay-for-performance, which goes directly towards paying the principal of the loan.

However, as helpful as the MakingHomeAffordable.gov site is for seeing if you are eligible for one of the programs, qualifying for a loan modification is too complex to be written into any one software system, so you should discuss options with a professional.  A mortgage servicer or a housing counselor can provide assistance even if the website declares you are not eligible for assistance.

If your mortgage is owned by Fannie Mae or Freddie Mac, you can make use of the portion of the site which walks you through a series of questions to see if you qualify for refinancing.  Payments on your mortgage must be up to date to take advantage of refinancing.    If you’re not sure if your mortgage is owned by Fannie Mae or Freddie Mac, use the site to find out.

To get the maximum benefit, be sure to double-check required fields, such as address and social security.  Remember the saying “garbage in – garbage out”, your results are more accurate if you can provide accurate information.

Even if the site says you are not eligible for assistance, you can talk to a counselor approved by the Department of Housing and Urban Development.  If you are already behind on your payments and require help right away, you can reach a counselor by dialing 1-888-995-HOPE (4673).

The website contains a helpful checklist to go through before contacting a counselor and also contains helpful advice to avoid foreclosure rescue scams.

Owning your home is part of the American dream.  You have worked hard for your home, don’t give it up without a fight.  You have resources you can use to save your home, so make good use of them.