Details on Homeowner Affordability Plan, and more


President Obama Outlined there would be opportunities to refinance homes held by Fannie & Freddie as well as, encouraging lenders to modify terms of loans to bring the debt to income (DTI) ratio to 38% by lowering the interest rate and/or reducing the outstanding principle balance. If the they do, the government will participate with them to further reduce the payment to 31% DTI and a 50/50 cost share basis.



  • To learn if you are eligible for refinancing look here.

  • To learn if you are eligible for modifaction look here.


    Requirements of Home Affordable Modification program:


  1. Primary residence?

  2. Is the amount you owe on your first mortgage equal to or less than $729,750?

  3. Are you having trouble paying your mortgage? For example, have you had a significant increase in your mortgage payment OR reduction in your income since you got your current loan OR have you suffered a hardship that has increased your expenses (like medical bills)?

  4. Did you get your current mortgage before January 1, 2009?

If you answered yes to the above than take a look at the detailed guidelines on how this will work. Page 6 details on the "Standard Waterfall Process", which gets into the actual calculation lenders are to use. I hare the why the guideline was written. I had a hard time staying awake reading it. There were no examples, no video explainations. Why, no have a professor use a blackboard and go through some exercises, so people can understand better if they qualify, thereby reducing calls to lenders by those who won't benefit, or won't like the benefit offered.


Anyway now that you understand how it will sort of work, contact your mortgage servicer and ask to be considered for a Home Affordable Modification. They'll want your financial documents (paystubs, W-2s, tax returns, other debt stmts, and bank stmts), so have them ready.

This plan is not designed to reduce mortgage balances for borrowers who have sufficient income to make their mortgage payments but owe more than their homes are worth. It also will not help investor borrowers or borrowers who have no income and cannot make any mortgage payment.

If you come across any good examples please let me know.