Mortgage Assistance Programs...

Mortgage assistance programs help people through patches of unemployment

In the current national economic crisis, unemployment has replaced mortgages that readjust to higher rates as the primary cause of home foreclosures. As a result, mortgage assistance programs are being offered to help people through the rough patches of unemployment.

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Mortgages: How To Pay Less

The interest rates for 30-year fixed-rate mortgages are in freefall, averaging just 4.44 percent on Aug. 12, according to Freddie Mac. Not only was that down from 5.07 percent in January, it was the lowest since Freddie began keeping records in 1970. To read the full Wall Street Journal story, please click here.

Fast Facts

Calif. median home price: June 2010: $311,950 (Source: C.A.R.)

Calif. highest median home price by C.A.R. region June 2010: Santa Barbara So. Coast $914,760 (Source: C.A.R.)

Calif. lowest median home price by C.A.R. region June 2010: High Desert $125,620 (Source: C.A.R.)

Calif. First-time Buyer Affordability Index - First quarter 2010: 66 percent (Source: C.A.R.)

Mortgage rates: Week ending 8/12/2010 30-yr. fixed: 4.44 Fees/points: 0.7% 15-yr. fixed: 3.93% Fees/points: 0.6% 1-yr. adjustable: 3.53% Fees/points: 0.7% (Source: Freddie Mac)

California Homeowners Receive Additional Foreclosure assistance

The Obama Administration today announced additional support to help homeowners struggling with unemployment through two targeted foreclosure-prevention programs--the existing Housing Finance Agency (HFA) Innovation Fund for the Hardest Hit Housing Markets and the soon-to-be-launched U.S. Dept. of Housing and Urban Development (HUD) Emergency Homeowners Loan Program. Through the Hardest Hit program, California will receive an additional $476 million to assist homeowners struggling to make their mortgage payments due to unemployment.

The Emergency Homeowners Loan Program will provide assistance to homeowners by offering eligible borrowers a declining balance, deferred payment “bridge loan” (zero percent interest, non-recourse, subordinate loan) for up to $50,000 to assist with payments on their mortgage principal, interest, mortgage insurance, taxes, and hazard insurance for up to 24 months.

Under the program, eligible borrowers must:

• Be at least three months delinquent in their payments and have a reasonable likelihood of being able to resume repayment of their mortgage payments and related housing expenses within two years;
• Have a mortgage property that is the principal residence of the borrower, and eligible borrowers may not own a second home;
• Demonstrate a good payment record prior to the event that produced the reduction of income.

HUD will announce additional details, including the targeted communities and other program specifics when the program is officially launched in the coming weeks.

FHA Launches ReFi Program For Underwater Borrowers

The Federal Housing Administration (FHA) last week provided details on its “FHA Short Refinance” program that will enable lenders to provide additional refinancing options to underwater homeowners. Beginning Sept. 7, the FHA is offering eligible underwater non-FHA borrowers the opportunity to qualify for a new FHA-insured mortgage.


Participation in FHA's refinance program is voluntary and requires the consent of all lien holders. To be eligible for a new loan, the homeowner must owe more on their mortgage than their home is worth and be current on their existing mortgage. The homeowner must qualify for the new loan under standard FHA underwriting requirements and have a credit score greater than or equal to 500. The property must be the homeowner's primary residence and the borrower's existing first lien holder must agree to write off at least 10 percent of their unpaid principal balance, bringing that borrower's combined loan-to-value ratio to no greater than 115 percent.

Additionally, the existing loan to be refinanced must not be an FHA-insured loan, and the refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent. Interested homeowners should contact their lenders to determine if they are eligible and whether the lender agrees the write down a portion of the unpaid principal.

Online Resource To Educate Struggling Homeowners

Fannie Mae offers online resource to educate struggling homeowners

Fannie Mae recently announced the launch of KnowYourOptions.com, a new consumer education Web site outlining the choices available to homeowners struggling to meet their mortgage obligations. The online resource, which offers information in both English and Spanish, provides guidance on how borrowers can contact and work with their mortgage servicer to find solutions.

Key features of KnowYourOptions.com include:

• Interactive Options Finder to help homeowners identify options that might be right for their situation;
• Calculators to help borrowers understand how many of the options work, including refinance, repayment, forbearance, and modification;
• Videos featuring real homeowners discussing how they received help and housing counselors providing advice;
• A virtual assistant to walk homeowners through key areas of the site; and
• Next steps and helpful forms, including a financial checklist and contact log to help borrowers be prepared when contacting their mortgage company or housing counselor.

Fannie Mae plans to implement a comprehensive marketing outreach campaign to raise awareness about the site and also intends to use the site as a vehicle to roll out new options for borrowers that are currently being developed.

Fast Facts

Calif. median home price: June 2010: $311,950 (Source: C.A.R.)

Calif. highest median home price by C.A.R. region June 2010: Santa Barbara So. Coast $914,760 (Source: C.A.R.)

Calif. lowest median home price by C.A.R. region June 2010: High Desert $125,620 (Source: C.A.R.)

Calif. First-time Buyer Affordability Index - First quarter 2010: 66 percent (Source: C.A.R.)

Mortgage rates: Week ending 7/22/2010 30-yr. fixed: 4.56 Fees/points: 0.7% 15-yr. fixed: 4.03% Fees/points: 0.7% 1-yr. adjustable: 3.70% Fees/points: 0.7% (Source: Freddie Mac)