Arn Cenedella

Do any of these government mortgage relief programs work?

I have generally been pretty skeptical about whether any of these much talk-about government programs will actually help any homeowners? Are these programs just more of the “promise a lot, deliver a little” that we seem to get out of Washington DC the past 10 years or will they actually help people.

I like to stay in touch with my past clients on a regular basis and try to speak with each of them at least every quarter and often once a month.

Today I called a first-time home buyer, Jim, who in January 2009 bought a home in Redwood City at a very affordable price. After a few minutes of chit chat, I suggested it might be a good time to look into a refi since rates have dropped maybe about 1% since they bought. He told me that they were already working on that through the Making Home Affordable program. They hope to reduce their rate over 1%.  Jim said since he mortgage was owned by Freddie Mac and Fannie Mae, Jim and his wife, Lynn, were eligible for an interest rate reduction. Please understand, Jim and Lynn are current on their mortgage payments – a requirement for the loan refinance. Jim and Lynn purchased with 5% down on a house a little over $500,000 – so a typical refiance that requires 20% equity is not possible for them – but with the MHA program refinances up to 105% of the value are allowed.

Jim told me they hope to know by June whether their application will be approved.

I am interested to see if the progrma will actually work as intended and reduce their loan payments to a more affordable level. Stay tuned and I will keep you posted.

Check the Making Home Affordable site for more info.

Click here to see if your loan is owned by Freddie Mac and Fannie Mae.

This entry was posted on Wednesday, April 1st, 2009 at 3:23 pm and is filed under Credit Information, First-time home buyers, Foreclosures, Helpful Sites, Pending Legislation, Real Estate Finance, Short Sales, Sub-Prime Mortgage Issue. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. Kappy Mann said at April 1st, 2009 at 6:09 pm

   good post Arn, I was wondering the same thing til I spoke with one of the ladies I work out with at the gym who, through this housing affordability program, was able to reduce her family’s house payment by over $1,000 a month. Talk about a stimulus program. Now they have all of that money to spend on other things in our economy. Good thinking, huh?

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