My synopsis of Obama's Make Homes Affordable Plan

With all the talk about stimulus packages and bailouts, the bottom line is that homeowners in crisis want to know, "Is any of this spending going to trickle down to me?" And if by "trickle down to me you mean" money in your hand to pay bills....probably not. In an announcement yesterday, the Department of the Treasury outlined the plan for stabilizing the mortgage marketplace and stemming the foreclosure tidal wave that has threatened to wash away the American Dream. The Making Homes Affordable Plan is a two pronged response designed to assist homeowners both current and delinquent homeowners. To keep abreast of the information related to this program go to FinancialStability.gov .

What you should know:

• You can only get assistance on your primary residence.
• Only loans owned or securitized by Fannie Mae or Freddie Mac are eligible for this assistance. Click here to see if your loan is owned by Fannie Mae or call 1-800-7FANNIE (8am to 8pm EST). Click here to see if your loan is owned by Freddie Mac or call 1-800-FREDDIE (8am to 8pm EST)
• You may need to be able to verify your income to prove to prove eligibility for assistance.
• Most won't need to re-qualify credit-wise.

Who can the programs help:

• A homeowner who is current on their mortgage payment, but cannot refinance to today's lower rates because property values have declined making their loan to value too high. These clients may be eligible for a streamlined refinance with no credit qualification, no NEW mortgage insurance(still needed if had MI was still required on existing loan) and up to 2% or $2000 cash out through this plan. (Note: Clients who live in areas where property values were extremely overinflated and have fallen 50% or more, like CA, may not be able to meet new Loan-ToValue(LTV) guidelines)
• Homeowners who are at least 60 days behind may qualify for a loan modification with no out of pocket costs with rates as low as 2% first 5 years, a potential $5000 principal reduction with on-time payments and terms of up to 40 years.

Contact your lender/servicer directly or a HUD approved housing counseling agency about these programs specifically if you have a Fannie or Freddie loan. A list of participating lenders/servicers will be available on the Financialstability.gov website.

Without bombarding your brain with endless eligibility guidelines on seasoning, eligible property types, debt to income ratios, and mortgage payment history; I will just say there are lots of stipulations that make the pool of potential homeowners who can be helped WAY too narrow, first complaint. My second complaint is that by not funding or requiring ALL program participants to participate in mandatory counseling, most homeowners will never understand or take ownership on how their speculating, financial illiteracy, and failure to plan for a rainy day may have contributed to the situation they are in now. I think most of us intend to be hard-working, responsible consumers, but failing to contemplate the the what-ifs, let alone sacrifice to overcome them, is a fundamental cultural defect that will continue to plague us if we don't educate ourselves.

With that said, I step down from my soapbox. If you have fallen behind or expect you might fall behind on your mortgage payment for any reason, don't wait.

• Contact your lender right away to advise them of your situation. Inquire about solutions that they may be able to offer to assist you, but don't give up if they don't seem to help.
• Minimally, get with a professional financial counselor to really assess your budget and develop an action plan.
• Even better still, contact a HUD approved housing counseling agency.
• Educate yourself and AVOID the SCAMS.

Fore more information on this or any of the postings on this site, contact Meredith McAllister, Certified Housing and Personal Finance Counselor, at her office 910.222.8751 or via email at meredith@onlinecreditcoach.com. My company, The New Legacy Project - a nonprofit organization, assists consumers with budget counseling, credit coaching, debt analysis, and housing counseling. Call today nationwide for a free consultation and budget counseling session.