Since early March, the government’s Making Home Affordable Program has helped over one million homeowners refinance and approximately 55,000 modify their current loans to save their homes.
As part of the Homeowner Affordability and Stability Plan, many borrowers are able to benefit from the low interest rates aided by the Treasury buying up Fannie Mae and Freddie Mac mortgage-backed securities.
In addition, Fannie Mae, under government conservatorship since September, has over 230,000 eligible refinance prospects, with over 50,000 with a loan-to-value (LTV) between 80 and 105 percent, which is well within the required LTV.
“In just over two months, the Make Home Affordable program is up and running, helping our economy recover and making a difference in the lives and livelihoods of thousands of American homeowners,” said Tim Geithner, Secretary of the Treasury in a statement.
“Today we are announcing a new program component to help homeowners obtain modifications in areas suffering from home price declines. If a modification is not possible, we are also announcing steps to encourage the quick private sale or voluntary transfer of property, which will save homeowners money and protect their financial future.”
“Together the incentive payments on all modified homes will help cover the incremental collateral loss on those modifications that do not succeed.
HPD P payments will be linked to the rate of recent home price decline in a local housing market, as well as the average cost of a home in that market.”
The Home Affordable Refinance initiative will continue until the end of June 2010, while the modification program will continue from now until the end of 2012.
“Fourteen servicers, including the five largest, have now signed contracts and begun modifications under the program. Between loans covered by these servicers and loans owned or securitized by Fannie Mae or Freddie Mac Home Affordable Modification participants now account for more than 75 percent of all loans in the country