Financing in San Ramon>Question Details

Jimmy, Both Buyer and Seller in San Ramon, CA

I need more information about the Homeowner Stabilization Act

Asked by Jimmy, San Ramon, CA Sun Feb 22, 2009

I purchased a home 10/2006 and as of right now I am almost underwater on my mortgage. My principle balance on my mortgage is $675,000. Is there a way to shave off the principle in order to bring my loan payments down? I have never been late on my mortgage but my loan will readjust next year and I won't be able to afford it at that point if the rates go up.

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Is the loan Freddie/Fannie backed? If not, not much help in this particular bill.

Also, keep an eye on loan-to-value and make sure you have a realistic view of the home's worth. Supposedly this will only apply to mortgage that will not exceed 105% of the current market value -- if you're nearly underwater already this could present an issue.

Best of luck.
0 votes Thank Flag Link Sun Feb 22, 2009
Hi Jimmy, please see the following link for a complete breakdown:

http://docs.Steven-Anthony.com/HomeAffordStabilityFactSheet.pdf

I would not make any moves until the plan's components start to solidify - changes are possible; however, as it currently stands, $417K is the max loan that will qualify for any assistance. Stay tuned.....

Also, it really time to pull out your loan docs (Promissory Note and Adjustable Rate Rider) to understand what your loan's index and margin are. It may be the case that your rate may GO DOWN. If you like, once you find these I can help you decipher the info.

Best, Steve
0 votes Thank Flag Link Sun Feb 22, 2009
Hello Jimmy,

As Bernie has said, it will be a few weeks before everything shakes out. There was a really informative article on the White House blog that I saved out to my hard drive. The text of it follows:
THE BRIEFING ROOM • THE BLOG
Wednesday, February 18th, 2009 at 9:36 am
Help for homeowners
The President’s strategy for economic recovery is a stool with several legs, as he’s said, and one of them is solving the foreclosure crisis.

"We must stem the spread of foreclosures and falling home values for all Americans, and do everything we can to help responsible homeowners stay in their homes," he said yesterday as he signed the American Recovery and Reinvestment Act into law.

Though communities across the country have been affected by the crisis, Arizona has been hit particularly hard -- in 2008, only two states had more foreclosures.

And President Obama is there today, in Phoenix, to unveil his "Homeowner Affordability and Stability Plan," which will help bring relief to homeowners and bring some order to the housing market.

The President will talk more about his plan a little later today. In the meantime, we’re sure you have a lot of questions, like, Am I eligible for assistance? Might I be able to modify my loan? When do I apply? We've put together an example sheet that will show you what options might be available to you, depending on the circumstances of your mortgage, as well as answers to some common questions (below).
Questions and Answers for Borrowers about the
Homeowner Affordability and Stability Plan
Borrowers Who Are Current on Their Mortgage Are Asking:
• What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?
Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.
• I owe more than my property is worth, do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.
• How do I know if I am eligible?
Complete eligibility details will be announced on March 4th when the program starts. The criteria for eligibility will include having sufficient income to make the new payment and an acceptable mortgage payment history. The program is limited to loans held or securitized by Fannie Mae or Freddie Mac.
• I have both a first and a second mortgage. Do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan. Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms on the first mortgage.
• Will refinancing lower my payments?
The objective of the Homeowner Affordability and Stability Plan is to provide creditworthy borrowers who have shown a commitment to paying their mortgage with affordable payments that are sustainable for the life of the loan. Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Borrowers who are paying interest only, or who have a low introductory rate that will increase in the future, may not see their current payment go down if they refinance to a fixed rate. These borrowers, however, could save a great deal over the life of the loan. When you submit a loan application, your lender will give you a "Good Faith Estimate" that includes your new interest rate, mortgage payment and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.
• What are the interest rate and other terms of this refinance offer?
... This will not let me paste the entire text (too long). Either e-mail me at Vickie@BestTriValleyHomes.com or go to the White House Blog for the entire text. I also pulled down some case studies that are quite informative that I could share.
Vickie Nagy
CA Lic #01363932
Keller Williams Realty
(925) 407-7987
Web Reference: http://VickieSellsHomes.com
0 votes Thank Flag Link Sun Feb 22, 2009
I posted my interpretation of the proposals on my Blog at http://www.realtown.com/bernardg/blog. Please check it out. Note that it will probably be a few weeks before anything is implemented though.

Let me know if there is anything I can do to help.

Bernard Gibbons

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Bernard Gibbons, Realtor, e-PRO Certified Internet Specialist
J. Rockcliff Realtors, 15 Railroad Avenue, Danville, CA 94526
Phone (925) 997-1585
bernard@bernardgibbons.com
0 votes Thank Flag Link Sun Feb 22, 2009
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