Who qualifies for Obama’s mortgage refinance plan?

Randy Johnson, president of Independence Mortgage Co. in Newport Beach, author of “How to Save Thousands of Dollars on Your Home Mortgage” and a mortgage broker since 1983, answers questions…

Q. I have been reading about Obama’s new housing bailout, and they say that homeowners who are “underwater” will still be able to refinance if their home loan was backed by Fannie Mae or Freddie Mac. 

Immediately, I started thinking, “do I qualify?” I’ve asked friends and have searched the Internet and have found varied responses to the one question I have — how do you find out if your loan is backed by Fannie Mae or Freddie Mac? 

We write our (whopping) mortgage check to Wells Fargo every month, and it’s not like the bank teller has that information readily available. I can’t find a straight answer anywhere. And if I do find out my loan is backed by Fannie or Freddie, what do I do next?”

A. Regarding not being able to get a straight answer, don’t feel like the Lone Ranger. But I do have good news for you. 

• If your loan servicer won’t or can’t tell you, you can still find out. To see if Fannie Mae owns it, go to www.fanniemae.com/homeaffordable. For Freddie Mac the website is www.freddiemac.com/avoidforeclosure/.Fill out their forms. Make sure your name and address are exactly the same as on your loan coupon. Just for fun I filled out the forms at each Website to see which one owns my loan. I am still awaiting a response.

1. If the loan is owned by either Fannie or Freddie, then you would qualify for the recent initiative for reducing the rate on loans that are between 80 to 105 percent loan-to-value (LTV) without mortgage insurance (PMI). 
2. If the loan required PMI initially, the lender can use the existing PMI contract.
   

The catch on this for Orange County owners is that any home bought in the last few years has likely dropped 20 to 30 percent, maybe more, and would be over 105 percent LTV. However, people who bought in the early 2000s might still be in that bracket and certainly can benefit.

• REALITY: this program has just been announced and it is highly likely that servicers have not yet developed their own policies and procedures and have not yet trained the staff on how to respond to inquiries. 
  

Danny in Corona asks:

Q. I purchased a condo in Oct. 2005 and financed both first and second mortgages at Chase. The first mortgage is a deed of trust (fixed rate) and the second mortgage is a California close-end deed of trust (a balloon note, but fixed rate). 

I have been unemployed since Oct. 2007 and all of my savings and emergency funds have been exhausted. I’m two months behind on both mortgages and approaching three months behind. I listed my condo for sale for over a year. Unfortunately, I had no luck. I also consulted with real estate brokers about doing a short-sale. However, they didn’t want to take it. 

I have no clue why. Anyway, if I successfully negotiate with Chase to have deed-in-lieu of foreclosure on my property or if Chase forecloses on my property, may Chase seek delinquent judgment on the second mortgage (closed-end deed of trust)? I have not refinanced since I purchased my condo.

A. First, I’m am sorry to hear about your situation and you have my prayers and good thoughts for a better outcome. You really need to ask a lawyer because technically that is a legal question. I think you will feel better informed if you look at a Website www.foreclosure.com/statelaw_CA.html, which summarizes current law. Frankly, I think that lenders have their hands full today and that they rarely go after defaulting borrowers, so I wouldn’t worry. Best of luck to you.

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Student Debt Consolidation Loans – Tool to Consolidate Finance for Students

In your schooling and college days, you have limited chances of earning. While most of the students get help from their parents or guardians, some of them also take up some form of part time job or summer job to meet their needs. But the expenses are not lower. Each and everything has a cost: books, bags, clothes, shoes, and many other things. Due to these expenses being higher than the income, students easily fall prey to different types of debts.

Each debt has a different rate of interest and different due dates due to which the students get more confused and start focusing on the finances rather than focusing on their studies. To help such students, the online money lenders have come up with the student debt consolidation loans.

This schemes aim at relieving the students of the different debts so that they can better concentrate on their studies. The consolidation debts are available for all students irrespective of their credit ratings. The factors taken into consideration are: age, academic record, and the different sources of income. The sources of income include the student's parents too. If the student is getting any sort of scholarship or is earning on a part time job, it is also taken into consideration for approving student debt consolidation loan .

The consolidation loan in effect is the takeover of all the different loans of the student by the consolidation service provider after negotiating with all the different creditors of the student. Once they agree, the consolidators take over the debt, that is, they pay it off. The student is then left with a single loan, which he or she availed under the scheme of student debt consolidation loans. Students are also often given some grace period so that they can start earning and repay the loan in ten to fifteen years.

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