Making Home Affordable Program
Will the "Obama plan" help me?

We will be posting details about the federal Making Home Affordable program here, as we learn them. So read through the periodic reports below. Also, here are our four most basic "rules."

Beware of scammers who contact you (by phone, e-mail, or advertising - including google ads). They'll offer to save your home, or get you a great modification for a fee. Under the federal guidelines, this service is supposed to be free, with no up-front fees. Be sure that you understand any loan modification, or refinance, and that you can afford it. Don't sign away your right to challenge the loan in court later on. Get advice from a FREE, qualified housing counselor in Maine, if you can, BEFORE you sign. (Go here to find a HUD-certified counselor outside of Maine.)

Brief overview of the program (.pdf file)

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September 10, 2009

The Treasury Department is releasing a monthly foreclosure report card on the nation's major banks. The report card tracks how they're implementing President Obama's plan. NPR reports that JPMorgan Chase and CitiMortgage have both started trial loan modifications on upwards of 23 percent of their delinquent loans. Meanwhile, Wells Fargo and Bank of America have modified a much lower percentage of their problem loans, and they manage by far the most loans.
Read or listen to NPR's story here
View August report

On the other hand, this graphic, posted by the Center for Responsible Lending, shows how the rise in late payments and foreclosure starts is outpacing the slow growth of the loan modification program.

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August 5, 2009

The Center for Responsible Lending has a new video about loan modifications. To watch the video click here.

Watch this video from Freddie Mac about how to prepare for a loan modification:

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July 23, 2009

We have been waiting and watching, to see if this program holds more promise than the previous "foreclosure prevention" programs that came out of Washington last year. The reports are mixed. On one hand, we are seeing anecdotal signs that more Maine servicers are willing to offer reasonable loan modifications. On the other hand, news reports indicate that not nearly as many people have been helped as the Obama administration had projected. Read more...

Some factors that appear to be preventing this program from becoming more successful:

• rising number job layoffs, causing homeowners to not be able to afford even reduced monthly payments
• securitized mortgages, where the owner is unwilling to take a loss, or where the servicer cannot determine who is authorized to approve a loan mod;
• servicers' slowness, or apparent inability, to put systems into place, in order to process large volumes of modifications
• lenders who did not get TARP funds being unwilling to participate in the program

Have you had a positive or negative experience with asking for a loan mod under this program? Tell us your story using comment link below.

COMMENTS

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May 15, 2009

The administration released program expansion guidelines yesterday. These include streamlined options for "short sales" and "deeds in lieu." They also include financial incentives for both servicers and borrowers to pursue these options where a borrower qualifies for the program but cannot afford a reasonable modification. The new rules also provide additional financial protections to lenders and investors against future loss in home value, to further encourage affordable modifications.

The administration claims that 75% of all home mortgages are now covered by the program. This does not mean, however, that all of those home owners will benefit. The administratioin claims that more than 55,000 Home Affordable Modification offers have been extended to borrowers. These new guidelines are intended to encourage more workout options and further decrease the continuing high rate of foreclosures.

More details here

COMMENTS

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May 13, 2009

NPR reports that at least some lenders are slow to gear up for doing loan modifications under "the Obama Plan." Get story here. Our advice is the same:

1. Be persistent.
2. Document all of you efforts: Who you talked to when. What you were told. Keep copies of papers you send.
3. Try to get help from a certified housing counselor or Pine Tree Legal or other qualified lawyer.

COMMENTS

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April 23, 2009

As promised, the administration has begun posting a list of loan servicers who have agreed to accept applications and consider modifications under the terms of the "Obama Plan." Many hope that this list will continue to grow. So if you don't see your servicer on this list now, check back.

COMMENTS

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April 7, 2009

We have been hearing from Maine's network of certified housing counsellors that some servicers have become more flexible with offering reasonable modifications since the Obama plan was announced. So if you need help, we encourage you more than ever to contact your loan servicer to request a loan modification. You still need to be careful. Make sure that you can afford the new deal. Current rules say that you only get one chance. And talk to a free housing counsellor, if you can, before you sign.

COMMENTS

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April 6, 2009

Most of the relevant information for homeowners has been moved here: www.makinghomeafforable.gov. You'll find easy-to-read FAQ's, an interactive loan modification evaluator, and a helpful explanation of your mortgage statement.

More in-depth information about the modification program has been moved a here. See links to "Additional Resources" at the bottom of the page.

COMMENTS

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March 7, 2009

Go here to get the Treasury Department's summary of both programs and the full Modification Program Guidelines.

Remember: This is another chance for scammers to make quick money. Get your information from reliable sources.

COMMENTS

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March 6, 2009

Three new details today:

• The Washington Post offers a helpful online eligibiity screening tool to help you figure out if you might be eligible for either a refinance or a modification.
• One big limitation of the plan: If your debt has been "securitized" or the owner of your debt cannot be found, or is still unwilling to offer a reasonable modification, you may still be out of luck. Only the larger banks will be bound by the new modification rules. For others, there is still the possibility of a bankruptcy solution (see next bullet).
• A modified version of the bill that would allow bankruptcy judges to modify loans on a case-by-case basis passed the House yesterday. A tough fight in the Senate is ongoing - to go up for final vote "within the next few weeks."

COMMENTS

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March 5, 2009

Details of the plan were announced yesterday.

The Associated Press has written a very helpful Q and A here. Read it and follow the steps. Our advice continues to be the same: Be careful! Even though the government is bringing more and more pressure on investors, and offering more financial incentives, you can still get into another bad deal.

• Be sure that you understand the loan modification, or refinance, and that you can afford it.
• Don't sign away your right to challenge the loan in court later on.
• Get advice from a FREE, qualified housing counselor, if you can, BEFORE you sign
• Beware of scammers who contact you (by phone, e-mail, or advertising) offering to save your home, or get you a great modification for a fee. Under the federal guidelines, this service is supposed to be free, with no up-front fees.

Note: The government is now saying that there will be a plan for people with second mortgages. More on this later.

COMMENTS

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February 24, 2009

On Feb. 18th, this Q and A page went up on the White House blog. This covers the broad outlines of the two major programs - one for homeowners at risk and one for those looking to refinance. We're focusing on the loan modification program for "at risk" homeowners (whose monthly payment is more than 31% of income).

Advantages of the new program:

• you do not have to be behind in your mortgage payments to qualify
• there is no fee for the modification
• the program offers "incentives for principal reductions," as part of the modification

Limitations of the program:

• as with earlier failed programs, lenders participate voluntarily ["But the government is offering substantial incentives and it is expected that most major lenders will participate."]
• Only the first mortgage is eligible for a modification.

Caution: To get help with a loan modification, contact a FREE certified housing counselor. Beware of scams! As the White House blog post states: "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."

Bankruptcy rule changes.You may have read that that Obama also supports a plan where federal bankruptcy judges could order modifications of home loans on a case by case basis. This change would require Congress to amend the bankruptcy law. We will be posting developments on this topic on our Foreclosure News page.

COMMENTS

Notice © Pine Tree Legal  Assistance September 2009 Sometimes the laws change. We cannot promise that this information is always up-to-date and correct.  If the date above is not this year, call us to see if there is an update. We provide this information as a public service.  It is not legal advice.  By sending you this information, we are not acting as your lawyer.  Always consult a lawyer, if you can, before taking legal action. Please review our full terms-of-use agreement

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