WHAT IS THE MHA PLAN?

The MHA, or Making Home Affordable plan, is an important aspect of the Obama Administration’s Financial Stability Plan that is intended to address the current housing market crisis by helping consumers with mortgage loan modifications. Consult a real estate attorney to help you understand the program.

The Making Home Affordable plan is broken down into two plans:

Home Affordable Refinance plan

The Home Affordable Refinance plan provides homeowners who are suffering from falling home prices access to low-cost refinancing in order to get a lower mortgage rate.

Under normal circumstances, Fannie Mae and Freddie Mac would not be able to guarantee a mortgage that exceeds 80 percent of the home's value. This obviously eliminates a lot of homeowners who want to refinance their home loans, sine home values have dropped dramatically.

The Home Affordable Refinance plan removes this restriction on Fannie Mae and Freddie Mac, allowing homeowners to get a better mortgage rate and extend the period of the loan. This doesn’t mean every homeowner qualifies for the program. A homeowner can qualify for the new federal government refinancing plan if:

- The property is owner-occupied and the existing mortgage is current

- The existing mortgage is owned by Fannie Mae or Freddie Mac

- The new mortgage balance does not exceed 105 percent of the home's current value

- The mortgage balance cannot exceed $729,750 for single-family homes

This Home Affordable Refinance plan runs until June 1, 2010.

Home Affordable Modification plan

The Home Affordable Modification plan will assist homeowners who are at risk of losing their homes to foreclosure. The loan modification plan is intended to bring monthly mortgage payments down to a level where the homeowner is not at risk of foreclosure.

Again, not everyone qualifies. In order to qualify for the loan modification program under the Making Home Affordable plan, the homeowner must:

- Occupy the home that will be the subject of the loan modification

- Have a mortgage created on or before January 1, 2009

- Be experiencing financial hardship or financial hardship is an imminent danger

- Have a current mortgage payment (including taxes and insurance) that exceeds 31 percent of their monthly gross income

- Have a loan amount that does not exceed $729,750 for a single-family home

- Apply by December 31, 2012

Unlike the Home Affordable Refinance plan, the loan modification does not require the mortgage to be owned by Fannie Mae or Freddie Mac.

To see if you are eligible for the MHA plan, contact a loan modification attorney at whocanisue.com today.