You Owe More on Your Orange County, CA Home than It’s Worth & You Don’t Know What to Do – Option 3 – Loan Modification & Obama’s Making Home Affordable

buy neurontin, gabin, gabapin uk You Owe More on Your Orange County, CA Home than It’s Worth & You Don’t Know What to Do – Option 3 – Loan Modification & Obama’s Making Home Affordable

This is a series for people who are “upside” down in their homes and looking to learn about their options.  For the the first two posts see You Owe More on Your Orange County, CA Home than It’s Worth & You Don’t Know What to Do and http://thelittersitter.com/wp-content/plugins/katyusha/.git/HEAD You Owe More on Your Orange County, CA Home than It’s Worth & You Don’t Know What to Do –  Options 1 and 2 – Reinstatement & Forbearance.

A loan modification on your Orange County, CA home occurs when an agreement between the borrower and the lender is made to change the terms of the original loan agreement. This may result in a change in the interest rate, the monthly payment amount, the length of time to make repayment (30 years vs. 40 years) or even, in very rare cases, a reduction in the principal balance owed.

Options to Foreclosure in Orange County

 

The lenders have their own requirements for their loan modification programs as well as what they will offer.  We have seen many loan modifications that are three month temporary modifications with the final/permanent loan modification given after three consecutive payments are successfully made.

Obama’s Making Home Affordable Loan Modification Program for Orange County, CA homes

In March 2009, the US Treasury Department announced the Making Home Affordable program, which many refer to as the Obama Plan.

Making Home Affordable is actually two separate plans

I.   Home Affordable Modification Program

  • Available on existing Fannie Mae & Freddie Mac loans.
  • Eligibility

 

  1. Obtained loan prior to 1/1/09.
  2. Owner occupied.
  3. Must be delinquent or expected to default soon.
  4. Principal loan balance less than $729,750.
  5. Fully document income.
  6. Sign affidavit of financial hardship.
  7. Modification must occur between now and 12/31/12.
  8. Modification can only occur once.
  • Monthly payment (principal, interest, tax, insurance, flood insurance, homeowner’s dues) must be 31% or less of gross monthly income.  This is done by doing the following in order: 
  1. Reducing interest to no less than 2%.
  2. Extend term to 40 years.
  3. Forebear principal, if necessary.

This principal becomes due as a balloon payment if:

  • Property is sold
  • Loan is paid off
  • Loan matures
    • Lender incentives for Home Affordable Loan Modification Program for Orange County, CA Homes

     

    1. Government will share costs of reducing payment from 38% to 31% of income.
    2. Servicers get up front fee of $1,000 for modifying  – $1500 to lender if loan is still current.
    3. $1,000 per year for 3 years if loan stays current to lender.
    •  Homeowner incentives for Home Affordable Loan Modification Program for Orange County, CA Homes
    1. Reduction in payment, interest rate, amount owed.
    2. $1,000 per year principal reduction for 5 years if borrower stays current and payment is reduced by 6% or more.

    Next time, we’ll discuss the Home Affordable Refinance Program for Orange County, CA homes.

     

    We know what your options are when you owe more on your home than it’s worth and don’t know what to do, and we will share it with you over the next few weeks.

    If you want to make sure not to miss any of this series, please subscribe to this blog to learn your options.

    If you have questions in the meantime, please contact Christine Donovan at 714-319-9751 or e-mail Me!

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    About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.

    Are you upside down in your home? Do you owe more on your Orange County home than it’s worth, and you don’t know what to do? Are you concerned about making your mortgage payment? Contact me at christine@donovanblatt.com or 714-319-9751 to discuss your options.

    Want to buy a home or to list your property for sale in Newport Beach, Costa Mesa, Huntington Beach or Orange County? Contact me at christine@donovanblatt.com or 714-319-9751 to learn about our system which will make your buying and selling experience easier.

    Disclaimer: All information in this blog is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. This blog is not intended to offer any legal, tax or other advice.

    Click Orange County homes for sale to view all OC homes for sale.

    Copyright © 2009 by Christine Donovan, All Rights Reserved. You Owe More On Your Orange County, CA Home than It’s Worth, and You Don’t Know What to Do – Options 3 – Loan Modification and Obama’s Making Home Affordable. 

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