Part of the recently enacted stimulus package is a program to allow homeowners whose loans were owned by Fannie Mae or Freddie Mac to refinance into lower cost loans. The big IF is that the program is limited to Fannie and Freddie borrowers who are current on their payments and who's loans are between 80% and 105% of the current value of the property. But who owns your loan?
Borrowers have been calling their servicers and have not been able to get a straight answer as to who owns their loans. If that's you, don't feel like the Lone Ranger. But I do have good news for you. If your loan servicer doesn't know or can't tell you, go to www.fanniemae.com/homeaffordable and www.freddiemac.com/avoidforeclosure/ and fill out their online forms. Make sure your name and address are exactly the same as on your loan coupon.
If the loan is owned by either Fannie or Freddie, they ought to get back to you, maybe not quickly though. I filled both out a week ago and haven't heard back. If you get a positive answer from either of them you would likely qualify for a new loan. PMI is not required if the original loan did not have it. If the loan initially required PMI initially the lender can use the existing PMI contract.
The catch for the hardest hit areas is that any home bought in the last few years has likely dropped 20% to 30%, maybe more, and would be well over 105% LTV. However, people who bought in the early 2000's might still be in that bracket and certainly can benefit for a lower rate.
REALITY: this program has just been announced and it is highly unlikely that servicers have developed their own policies and procedures. Neither will they have trained their staff on how to respond to inquiries. For an example of how twisted things can get, see
http://consumerist.com/5167408/citi-homeowner-helper-site-merely-potemkin-village
Randy Johnson – Author of How to Save Thousands of Dollars on your Home Mortgage and Savvy Borrowerarticles. Randy is a mortgage broker who has financed over $1 billion
in properties. He writes about home buying and real estate finance
topics for CreditBloggers.com.
Randy Johnson Randy is a Credit.com contributor and seasoned mortgage expert. He writes about home buying, mortgage laws and real estate finance issues. He has financed over $1 billion in properties, is the author of How to Save Thousands of Dollars on your Home Mortgage and he is a feature columnist for Savvy Borrower.
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