Eligible for Government Refinancing? Loan Modification Part 2

Struggling but not behind

Do you feel buried by your mortgage? Refinancing could help.

In Part 1 of this Loan Modification series, I talked about the first part of the government’s Foreclosure Prevention Plan. The modification program is available to homeowners who are already three months behind on their mortgage.

If you are not behind on your mortgage but are struggling to make payments, you might be eligible for the Refinance portion of the Foreclosure Prevention Plan.

Fannie and Freddie customers

The federal government now owns majority stock in the nation’s biggest mortgage-holding companies, Fannie Mae and Freddie Mac. The federal Foreclosure Prevention Plan offers homeowners whose mortgages are held by these companies to refinance if they are having a hard time making payments on their personal loans.

Payment to income ratio

The main goal of the foreclosure prevention plan is to get homeowners’ payments to 31 percent of their monthly income. If your payments are already less than 31 percent of your income, you likely will not qualify.

Only for struggling homeowners

However, if you are paying more than that, you could be eligible for refinancing. The catch is, you must provide proof of hardship. Providing proof of hardship is required to take advantage of either the Loan Modification or the Refinancing program. ... click here to read the rest of the article titled "Eligible for Government Refinancing? Loan Modification Part 2"