Earlier this month, the federal government unveiled its “Making Homes Affordable” program, which proponents said could help as many as 9 million homeowners.
The program offers a dual approach.
- refinancing for homeowners already paying their mortgages on time who can’t refinance because of a drop in the values of their homes, and
- modification of loans that homeowners are struggling to pay because of higher interest rates or reduced household income.
Lenders and other housing industry officials applaud the program as a good first step.
“Even before the guidelines for the program were announced, Wells Fargo began to assist customers who could benefit from the new solutions,” said Wells Fargo spokeswoman Debora Blume. “We reviewed our loan portfolios for possible candidates, suspended foreclosure sales, updated our Web sites and talked to customers about the possible benefits the new programs could offer.”
“We have been encouraging customers to gather the necessary documents so that when we are able to offer the new solutions, they would be immediately ready to work with us to determine eligibility.”
Last Friday, Wells Fargo mailed letters to customers whom they deemed most in need of assistance and “who we believe could be eligible, encouraging them to contact us,” Blume said.
“Since the guidelines have been finalized, we have been working very quickly to put the systems in place to make the programs available.”
But the refinancing portion is aimed at Fannie Mae and Freddie Mac customers, and some say the MHA program won’t affect many of their mortgage customers.
“Renasant is not a servicer for Fannie Mae and Freddie Mac so we will not be directly involved in refinancing mortgages through the “Making Home Affordable” program as we understand it,” said Renasant Bank Chairman and CEO Robin McGraw. “As for the overall impact on our clients and the banking and mortgage industry, we are still assessing the details of the program.”
With mortgage rates at or near historic lows, there has been a surge in refinancing.
“In the current mortgage rate environment, we are seeing a large uptick in refinancing and anticipate this to continue in the near future as consumers are looking for more ways to save money, especially in light of the recession,” McGraw said.
Getting a home loan, however, is a bit tougher these days, as lenders have tightened standards. But those who qualify are getting good rates.
Experts suggest homeowners talk to lenders to determine if refinancing will work for them in the long run.
Anthony Atkins, president of the Mississippi Association of Mortgage Brokers, said the state has been fortunate that its housing market hasn’t tanked like those in California, Florida and Nevada, where the MHA program will likely help the most.
“We didn’t get into those exotic mortgages that have trapped so many people,” Atkins said.
Dennis Seid/Daily Journal