Serving the Northwest Suburbs, Bartlett, Streamwood, Schaumburg, Roselle, West Chicago, Hoffman Estates, Itasca, Medinah, Carol Stream, Elk Grove Village, Bloomingdale, and more!

Visit Sharon Falco on Facebook Visit Sharon Falco on Twitter
  • Select City:
  • Min Price:
  • Max Price:
  • Min Baths:

Meet Sharon Falco

Home Owner Recovery Plan

Mortgage Relief for Hard-Pressed Homeowners!

Homeowners who think they are in trouble or nearing it with their mortgages should look into the new federal mortgage relief program sponsored by the Obama administration.

How effective this program will be depends on many factors:

  • Will homeowners take needed steps to seek help?
  • Will government processes be administered efficiently enough to handle the work load; admittedly these work volumes are unknown at this time
  • Will collaborating lenders flex enough to deliver borrowers the results promised by the government program?
  • Will administrative processes be simple enough for most people to understand and thus use the program effectively?
  • Will borrower assistance be available to those who cannot understand their financial condition well enough to apply on their own? And in time to be helped?
  • Will $75 Billion committed to the program be enough to stem mortgage woes?  If not, will Congress extend the program for time eligibility and funding?

With those thoughts in mind let’s examine what the Obama administration’s program is all about. The program has strong surface simplicity to be effective.  But a good idea and its implementation are two entirely different things! The jury on that is still out.

Called the Affordable Home Program, there are two different portions, each a program unto itself.  The first is named Home Affordable Refinance Program. Its primary objective is to help homeowners refinance their mortgages in cases where the home’s value has dropped to less than the loan amount.  These are “underwater” loans where the owner owes more than the house is worth.

The second is named Home Affordable Modification Program.  Its primary objective is to keep homeowners in their primary residence by modifying the terms of the loan so it is more affordable to the debtor in cases where illness, loss of job or other reversals have reduced household income; also included are cases in which adjustable loan rates have increased to make monthly loan payments unaffordable. There is a standard: 31% or less of a homeowner’s monthly income is considered affordable; more than that risks future default and possible foreclosure.

To determine if a borrower needs help a click online at making home affordable.gov will place him into the government’s program directly. The site is simple and direct, easy to understand and navigate. The two programs are briefly explained, and each has an eligibility button to click. Each eligibility path is easy to follow and leads the potential applicant through a very basic questionnaire. If not eligible, that program will lead you to the other program. If eligible the borrower is led through another easy pathway to apply for assistance.  When finished, the borrower is advised that program staff will contact the applicant soon.  How soon has yet to be determined. The borrower can easily exit the program without further involvement.

More information on each program:

Home Affordable Refinance Program: open to homeowners whose property has lost value to the point where the loan balance is worth more than the house. 

  • The loans must be conforming and backed by Fannie Mae or Freddie Mac
  • The program waives the usual requirement that the homeowner must have at least 20% equity in the home
  • The borrower must be current with loan payments
  • Participants must be able to document their income
  • Loan balance must be less than $729,750
  • Financed residence must be primary residence, not a second home or investment property

Home Affordable Modification Program: open to homeowners who do not conform to the Refinance Program, above, and are facing reduced income that threatens default on the mortgage loan.  This program is focused on keeping people in their primary residences and reduce foreclosure in the future.

  • Payments must have become unaffordable due to job loss, illness, or resetting adjustable interest rates on the mortgage, or a combination of any of these factors
  • Program helps lenders lower monthly payments to as much as 31% of the borrower’s monthly income
  • This may require lowering the interest rate to as low as 2% for a five year period; or extend the term of the loan up to 40 years, or temporarily reduce the principal amount owed on the loan
  • Loan modifications only apply to primary mortgages, not second mortgages, home equity loans or consumer debt. Programs do exist that will work with secondary lenders for relief to the borrower

Don’t let the above details confuse or delay your search for help.  Simply get online and go to www.makinghomeaffordable.gov.

George Safford
June 12, 2009

 


  • Bartlett Homes
  • Roselle Homes
  • Streamwood Homes
  • Hanover Park Homes
  • Schaumburg Homes
Looking for a home in Bartlett, Illinois? Bartlett offers a variety of neighborhoods with just the right mix of retail stores, great restaurants, and valuable office space. Whether you are looking for condo, townhome, coach home, single family house, or a multiple unit property, Sharon Falco and her group can assist you!
Looking for a home in Roselle, Illinois? Roselle offers a variety of neighborhoods with just the right mix of retail stores, great restaurants, and valuable office space. Whether you are looking for condo, townhome, coach home, single family house, or a multiple unit property, Sharon Falco and her group can assist you!
Looking for a home in Streamwood, Illinois? Streamwood offers a variety of neighborhoods with just the right mix of retail stores, great restaurants, and valuable office space. Whether you are looking for condo, townhome, coach home, single family house, or a multiple unit property, Sharon Falco and her group can assist you!
Looking for a home in Hanover Park, Illinois? Hanover Park offers a variety of neighborhoods with just the right mix of retail stores, great restaurants, and valuable office space. Whether you are looking for condo, townhome, coach home, single family house, or a multiple unit property, Sharon Falco and her group can assist you!
Looking for a home in Schaumburg, Illinois? Schaumburg offers a variety of neighborhoods with just the right mix of retail stores, great restaurants, and valuable office space. Whether you are looking for condo, townhome, coach home, single family house, or a multiple unit property, Sharon Falco and her group can assist you!

Copyright 2010 by Sharon Falco & SFG Marketing, LLC