Refinancing Your Home Loan and Government Loan Modification Programs

Every program developed to help distressed homeowners seem to be so complicated these days. The minutia of qualifications and clauses can frustrate and sometimes deter homeowners that are already stressed out from the fear of losing their homes.

One of the primary concerns is to determine if your loan is backed by the Government - Fannie Mae or Freddie Mac. To find out if your loan is backed by a Fannie Mae or Freddie Mac you can check their websites or simply call their 800 numbers.

• Fannie Mae’s Mortgage Lookup Form: Fannie has a larger market share, so check here first. This one won’t ask for a social security number. You can also call: 1-800-7FANNIE (8am to 8pm EST).

• Freddie Mac Mortgage Lookup Form: If Fannie Mae isn’t showing your loan on their books, try out Freddie Mac to see if they back your loan. Requires SSN. You can also call: 1-800-FREDDIE (8am to 8pm EST)

Next, you need to determine if you’re entitled to refinance your loan or if you qualify for the homeowner loan modification programs.

Are You Eligible for the Homeowner Government Program?

You must meet the following criteria in order to refinance your loan:

• If your loan originated before January 1, 2009.

• Your loan is backed by Fannie Mae or Freddie Mac

• You must be current on your mortgage payments with no 30 day delinquencies in the past 12 months.

• You have sufficient income to make the new mortgage payments.

• Your first mortgage will not exceed 105% of the current market value of the property.

You must meet the following criteria to be eligible for a homeowner loan modification:

• Your loan must have been obtained on or before January 1, 2009.

• First-lien loans on owner-occupied properties with an unpaid principle balance up to $729,750

• Document income with signed IRS form 4506-T and provide two most recent pay stubs and your most recent tax return.

• Sign an affidavit of financial hardship.

• Modify the existing loan by December 31, 2012.

• Have a mortgage payment that is no longer affordable; for example you have had a significant change in your income or expenses.

• The mortgage loan is in danger of going into default or your loan is currently in foreclosure.

With that at-a-glance information, you should be able to determine if you are eligible. Your next step is collecting all the paperwork needed so that when you call your loan advisor and ask about your options under the Making Home Affordable program, you’ll be ready to answer all questions.

You’ll need:

• Information about monthly gross income, including recent pay stubs if the borrowers are salaried and receive them and documentation of any income received from other sources.

• Most recent income tax return.

• Information about assets.

• Information about any second mortgage on the house.

• Account balances and minimum monthly payments due on all credit cards.

• Account balances and monthly payments on all other debts such as student loans and car loans.

Take the time and do your homework. Being properly prepared will give you whay you need to negotiate a succesful refinance or loan modification.

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