Home Underwater? Help May Be on the Way

Last week President Obama announced a landmark $25 billion settlement between the federal government and five of the major mortgage servicers – Bank of America, Wells Fargo, Citi Mortgage, JP Morgan Chase and Ally/GMAC. We are still waiting for details, but the agreement includes assistance for:

• Homeowners who are underwater (home value is less than what’s owed) but have remained current in their payments
• Homeowners in need of a loan modification due to financial hardship
• Homeowners who lost their homes to foreclosure

This is particularly good news for those who purchased between 2004 and 2009 as they have been hit the hardest by decreased home values.

Before you grab the phone to see if you qualify there are a couple of things you should know.

• Loans owned by Freddie Mac or Fannie Mae are not included under the agreement – not sure if that’s you, check here for FannieMae and here for FreddieMac.
• Be prepared to be patient. It’s going to take a few months for the third party administrators to be selected, systems to be set up and qualifying borrowers to be identified.
• Qualifying borrowers will be identified and contacted via mail in the next three to nine months however, you can contact the servicer directly.
• Not all loans qualify

For more information visit the National Mortgage Settlement website for additional details including phone numbers for the five major mortgage servicers included on the settlement.

Stay tuned for more information as it unfolds!