Banks Starting to Modify Mortgages Under U. S. Treasury Refinance Program
Throwing a lifeline to homeowners under water on their mortgage obligations, the U.S. Treasury announced its Home Affordable Refinance Program in mid-February. The program is supposed to facilitate mortgage servicers in modifying troubled homeowners’ mortgages so that their monthly payment is reduced to no more than 31% of gross monthly income. Eligibility requirements include that the loan have been originated on or before January 1, 2009 and that the mortgage is a first lien on owner-occupied property. The unpaid principal balance can be up to $729,750. Income must be documented and the homeowner must sign an affidavit of financial hardship.
It sounds great in principle. The trouble was that no banks seemed aware of the program.
That may be changing. According to Carolyn Said’s blog yesterday in the San Francisco Chronicle, Ocwen sent out a press release this week claiming that it “is among the first servicers (if not the first) in the country to begin executing loan modifications under the U.S. Treasury Department’s new Home Affordable Modification Program.” And last week Bank of America/Countrywide sent out its own press release saying it would start doing trial loan modifications in two weeks.
Hopefully this indicates that other banks are becoming aware of this program and will offer it to homeowners whose mortgages they service. If you think this program can help you, print out the summary and take it to your mortgage servicer. The more educated you are, the more you can help yourself.