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| Note: that the terms and provisions of this program have yet to be finalized by the U.S. Treasury, and the provisions set forth below are still subject to change pending final issuance by the U.S. Treasury Department. |
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| The Making Home Affordable program is part of President Obama's comprehensive strategy to get the housing market back on track. Up to 9 million American families may be eligible to modify their loans to a lower payment that is affordable now and into the future. |
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| Yes. The Making Home Affordable program offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current. By providing homeowners with financial incentives to modify existing first mortgages, the U.S. Treasury Department hopes to help as many as three to four million homeowners avoid foreclosure regardless of who owns or services the mortgage. |
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The general qualifications for a CFE first mortgage holder to be eligible for this program are:
- Be an owner-occupant of a one to four unit property
- Have an unpaid principal balance that is equal to or less than $729,750 for one unit properties (consult CFE for two to four unit properties)
- Loan originated before January 1, 2009
- A mortgage payment (including taxes, insurance, and home owners association dues) more than 31% (or approximately 1/3) of your gross/pre-tax monthly income verifiable through income tax statements, pay stubs, etc. and
- A mortgage payment that is no longer affordable, perhaps because of a significant change in income or expenses.
If you are accepted into this program, the U.S. Treasury Department will require you to be placed on a “trial” modification for three months at the new interest rate and payment. If you successfully make the payments and are current at the end of the trial period, CFE will execute a permanent modification agreement that will lower your interest rate to a fixed rate for five years.
Based on questions 2 & 3, only CFE will be able to tell you if you qualify, provided your first mortgage is with CFE. If your first mortgage is not with CFE, you should contact your current mortgage lender for qualifications. Additional parameters may apply upon qualification.
If your loan is current, please be patient. The U.S. Treasury Department published most program requirements on March 4, 2009 and it will take some time before mortgage lenders are fully operational. However, the U.S. Treasury Department has encouraged CFE to immediately begin reviewing the eligibility of delinquent borrowers that are at the greatest risk of foreclosure. |
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It will help CFE speed processing of your application if you gather appropriate information and documents before you call. You will need:
- Information about the monthly gross income of your household, including recent pay stubs if you receive them or documentation of your income you receive from other sources
- Your most recent income tax return
- Information about your assets
- Information about any second mortgage on your house
- Account balances and minimum monthly payments due on all of your credit cards
- Account balances and monthly payments on all your other debts such as student loans and car loans
- A letter describing the circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc)
- List of living expenses (utilities, phone, etc.)
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| No. Responsible borrowers who are struggling to remain current on their mortgage payments are eligible if they are at risk of imminent default. |
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| If you have missed two or more mortgage payments, CFE will evaluate your loan to determine if you qualify for a modification.
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| Yes. However, only the first mortgage is eligible for a modification. Second Mortgages and Home Equity Lines of Credit DO NOT qualify for this program. If you have a second mortgage and/or Home Equity Line of Credit with CFE, please contact us for alternatives that may be available for these products outside of the scope of the Making Home Affordable program. |
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| No. For example, if you own a house that you use as a vacation home or that you rent out to tenants, the mortgage on that house is not eligible. If you used to live in the home but you moved out, the mortgage is not eligible. Only the mortgage on your primary residence is eligible. The mortgage lender will check to see if the dwelling is your primary residence. |
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| Mortgage lender participation in the program is voluntary, but CFE anticipates participating in this program. It is expected that most major mortgage lenders will participate. As with other mortgage lenders, CFE is awaiting details from the U.S. Treasury Department on how to participate and assist members in utilizing the program. |
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| Based on your answers to question 3, CFE will contact you to further discuss your potential eligibility into this program and additional steps to be taken. Please have the documents outlined in question 4 prepared and ready for discussion. |
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| Yes. If CFE determines that a principal forbearance (deferment of repayment to a later time) is required to get your monthly payment to an affordable level, a balloon payment equal to the amount of the forbearance will become due upon loan payoff, refinancing, or sale of the property. For example: if the forbearance was $20,000, it would be subtracted from the amount used to calculate your monthly mortgage payment, but you would still owe the money. You would have a $20,000 balloon payment that had no interest and was not due until you paid off your loan, refinanced, or sold your house. |
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| No. There is no fee to borrowers under the Home Affordable Modification. If there are costs associated with the modification, such as payment of back taxes, CFE will add those costs on to the amount you owe. |
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All borrowers considering participation in this program (especially delinquent borrowers) are strongly encouraged to contact a HUD-approved housing counselor to help them understand all of their financial options and to create a workable budget plan. Housing counseling is only required for borrowers whose total monthly debts are very high in relation their incomes. It is voluntary for others.
If you would like assistance from a HUD-approved housing counseling agency or are referred to a counselor as a condition of the modification, you will not be charged a counseling fee. You may contact a HUD-approved housing counselor at 1-888-995-HOPE (4673). Note, borrowers should beware of any organization that attempts to charge a fee for housing counseling or modification of a delinquent loan, especially if they require a fee in advance.
When you apply at CFE for a Home Affordable Modification, CFE will analyze your monthly debts, including the amount you will owe on the new mortgage payment after it is modified, as well as payments on a second mortgage, car loans, credit cards, or child support. If the sum of all of these recurring monthly expenses is equal to or more than 55% of your gross monthly income, you must agree to participate in housing counseling provided by a HUD-approved housing counselor as a condition of getting the modification. |
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| Yes. Borrowers who make timely payments on their modified loans will receive success incentives. For every month you make a payment on time, the U.S. Treasury Department will pay an incentive that reduces the principal balance on your loan. Over five years the total principal reduction could add up to $5,000. This contribution by the U.S. Treasury Department will help you build equity faster. |
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| Borrowers whose loans have been scheduled for foreclosure or any borrower that has missed one or more mortgage payments and has not yet spoken to CFE should contact us immediately. Borrowers may also contact a HUD-approved housing counselor by calling 1-888-995-HOPE (4673).
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| If you meet the general eligibility criteria for the program, you should gather the financial documentation referenced in question 4 that CFE will need to determine if you qualify. Once you have this information, you should call CFE and ask to be considered for a Home Affordable Modification. The number is 407-896-9411 or 800-771-9411, option 3.
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| Please contact CFE to determine if you are still eligible for a modification under this program.
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- There should never be a fee for information or assistance about the Making Home Affordable program.
- Beware of any person or organization that asks you to pay a fee in exchange for a counseling service or modification of a delinquent loan. Do not pay – walk away!
- Beware of anyone who says they can “save” your home if you sign or transfer over the deed to your house. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
- Never make your mortgage payments to anyone other than your mortgage company without their approval.
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