I'm writing this diary to provide some information and a personal perspective on President Obama's "Making Home Affordable" program. I hope it is of some use to my fellow Kossacks!
Several weeks ago this diary was written about the "Making Home Affordable" program. This program was created by the Obama Administration to provide help to families struggling with their mortgage payments. Before I get into the specifics of the other diary and my own experience, I'd like to tell you more about the program.
The Making Home Affordable program is a part of the President's Stimulus Plan to keep people in their homes and help prop up the crumbling Housing Sector. This is NOT a government handout or a sneaky way to allow folks to profit off others' misfortunes. It DOES provide real help to legitimate homeowners. There are two parts to the program: the Refinancing arm that helps homeowners who are current on their loans but would like help getting a lower rate and the Modification arm that helps homeowners who are behind on their loans and are under threat of forclosure. Homeowners who qualify work with their own lenders to obtain a refi or a modification; there is no program "middleman". The program stipulates that the fees and the amount of paperwork usually associated with these things have been eliminated or greatly reduced. The application process has been streamlined to get through the process quickly. Based on the qualifying criteria, between 7 and 9 million homeowners are eligible to participate in this program. I'd like to urge anyone who needs help, is underwater on their mortgage, or would like to lower their rates and get a lower monthly payment to look into this program. Because so many people are applying, the turnaround time for a refinance will take a little while. I'm assuming that those in danger of losing their homes will be fast-tracked.
The writter of the aforementioned diary was quite skeptical of the program and provided "information" from a "realtor friend" to show that this program was a scam, basically, and that no one would benefit from it. I, along with several other people, responded with our own anecdotal information that showed the program IS working. At the time I posted my comments, my application was processing and I was just waiting to see if we qualified and how much help it really would be to us.
Well, yesterday, our lender called and told us we formally qualified! Yay! Our appraisal/home valuation came in quite a bit less than we had hoped, but it was not really that surprising given the current housing market. We still have a small chunk of equity and are hopeful that in time it will rebound, but for now, it's ok. Our rate was lowered by a point and a half and we will save almost $240 a month. This is very welcome relief. Since I only work around 15 hours/week things are pretty tight for us financially. This program let us obtain a refinance that we otherwise would not qualify for due to losing so much equity in our home as well as my income dropping a bit from when we originally got our loan. We are signing the papers in the next few days and will finalize the loan in late June/early July. It was a very easy process.
That brings me to this point: The Making Home Affordable program will put more money into citizens' pockets. What do people tend to do with extra money? Spend it! Well, in these trying financial times, some of it will go into savings, for sure, but some of it will be spent, thus stimulating the economy. Not only does this program help people keep their homes (through the Modification portion of the program), it also helps to stimulate the economy's Retail Sector, which is still taking a beating.
So please, do not listen to the doomsayers. This program IS working for lots of folks. It could even work for you.