Silicon Valley REALTORS® are eager to help make President Obama's Making Home Affordable plan a reality. The Silicon Valley Association of REALTORS® (SILVAR), a professional trade organization representing over 4,000 REALTORS® and affiliate members engaged in the real estate business on the Peninsula and in the South Bay, is pleased the administration has released the guidelines for refinancing and mortgage loan modifications and that the guidelines will be implemented immediately to help struggling homeowners as well as millions of eligible homeowners who have stayed current in their mortgage payments.
"The stabilization of the housing market will lead to our nation's economic recovery, and helping families keep their homes should be a key component of any federal recovery plan," said Julia Truesdale Keady, president of SILVAR.
REALTORS® believe allowing eligible homeowners to refinance or modify their loans will help millions of families avoid foreclosure. This in turn will support the housing recovery by slowing the growth in inventory due to foreclosures. Lowering unsold inventory will help stabilize home prices and values.
There are two tiers to the Making Home Affordable program. The first tier is the Home Affordable Refinance program, which will help homeowners who have a solid payment history on an existing mortgage owned by Fannie Mae or Freddie Mac. Normally, these borrowers would be unable to refinance because their homes have lost value, pushing their current loan-to-value ratios above 80 percent. Under the Home Affordable Refinance program, many of them will now be eligible to refinance their loan to take advantage of today's lower mortgage rates or to refinance an adjustable-rate mortgage into a more stable mortgage, such as a 30-year fixed rate loan.
The second tier is the Home Affordable Modification program, which will help up to three to four million at-risk homeowners avoid foreclosure by reducing monthly mortgage payments. Working with the banking and credit union regulators, the FHA, the VA, the USDA and the Federal Housing Finance Agency, the Treasury Department hopes these standards become the industry practice in pursuing affordable and sustainable mortgage modifications. This program will work in tandem with an expanded and improved Hope for Homeowners program.
Eligibility and qualification for this program include:
• Loan was originated on or before January 1, 2009.
• First-lien loans on owner-occupied properties with unpaid principal balance up to $729,750. Higher limits allowed for owner-occupied properties with two to four units.
• All borrowers must fully document income, including signed IRS 4506-T, two most recent pay stubs and most recent tax return, and must sign an affidavit of financial hardship.
• Property owner occupancy status will be verified through borrower credit report and other documentation; no investor-owned, vacant, or condemned properties.
• Incentives to lenders and servicers to modify at-risk borrowers who have not yet missed payments when the servicer determines that the borrower is at imminent risk of default.
• Modifications can start from now until December 31, 2012; loans can be modified only once under the program.
For more details on incentives to servicers, lenders and responsible borrowers, on loan modification program terms and procedures, and other aspects of the Making Home Affordable program, please visit www.financialstability.gov.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.