Need to get out of a hole? This can do it for you, and it makes sense, both for you and for your mortgage servicer. Fannie Mae will lend you up to $15,000 of its own money to bring you current and stave off the specter of foreclosure. Unsecured. At an interest rate of 5%. With mortgage lates on your credit! This is a personal loan from FNMA to help you keep your home.
Why does it make sense? Won't FNMA lose some money doing this? The answer lies in the real cost of foreclosure to Fannie Mae and your lender. Compared to the average loss of $40,000 on a typical foreclosure, loaning you money at a low interest rate is a no-brainer. The purpose of the personal, unsecured loan is to bring you current on your mortgage and let you keep your home.
You don't get the money. It will go directly to your mortgage servicer. Here's how FNMA describes the purpose of the loan:
"HomeSaver Advance is designed for qualified borrowers who have fallen behind on their mortgage, but are able to resume timely payments once their loan is brought current by the advance. It helps [to] streamline the workout process for applicable loans, as it provides an option for earlier resolution of delinquent loans."
Here are the highlights of the program, which will begin next week (April)
- Loan amount up to the lesser of $15,000 or 15% of the original unpaid principle balance for delinquent PITI, escrow advances (money to pay your taxes and insurance), up to 6 months of unpaid HOA fees, and advances for attorney's fees and costs.
- Late charges and other ancillary fees and costs may NOT be paid by the loan. (Want to bet that your mortgage servicer will waive those fees in order to bring you current? Bet your bippie!)
- Money goes to arrearages. You never get cash in hand.
- The note will be at a fixed rate of 5%. The first six months are a no interest/no payment period!
- Amortization period is 14.5 years after the initial six months.
If you have kept in touch with the person who originated your mortgage, ask him or her to help you. He or she will not be paid to do this, so it will separate the sheep from the goats, so to speak. If you don't get help, it tells you something about your loan officer. Find one who will help!
EDIT: For your specific mortgage situation, you must call your mortgage servicer, not Fannie Mae. I'll dig deeper and write another post in the next few days on the subject.
I'm Mike in Tucson, your preferred Tucson, Arizona mortgage lender.
Think of me as your Local Expert.
Susan,
Thanks for being the first to comment. Spread the word. This is available starting April 1, and I haven't seen another post about it yet.
Mike in Tucson
John,
Pay it forward! Spread the word.
Mike in Tucson
Larry,
Nationwide, including Alaska and Hawaii.
Mike in Tucson
This could be some very uplifting information for some folks - I'll spread the word in my corner of the world.
Always something Great here, just like Susan said...she summed it all up for us all! Nice Job!
Take Care,
Tom Davis Delaware Realtor
Tom,
Oops! You slipped in there while I was reciprocating! Thanks for commenting!
Bob,
The person who has the capacity to do the most good is the loan officer. I think if my LO called me when I was in trouble, and helped me out of a jam, I'd be the biggest fan and referral machine you could imagine!
Eric,
First, second, and INVESTOR!
Kent,
Ditto what I said to Bob. As a realtor, imagine the good will you will garner by spreading the word!
Mike in Tucson
Mark,
You bet! Thanks for commenting and for your email.
Mike in Tucson
Lissa,
Thanks. Pass the word along.
Missy,
Next week. It starts in April. I have people lined up for help when it starts.
Adam,
Thanks, Bud! Spread the word.
Mike in Tucson
Mike,
Great post...I flagged and bookmarked!!! Thanks, Fran
Mike,
Do they contact the lender that they are in the rears with or Fannie Mae?
Ann,
It was in the mid 80's today. The sheep on the left came from Flickr, but I took the photo of the goat right here in Tucson. They ARE cute, aren't they? I hate to post without a photo or two to keep it visually interesting.
Rick,
You must contact your mortgage servicing company, not Fannie Mae. The program starts next week, and I'll do some more research and write a followup post. Thanks for commenting.
Barbara Jo,
Thanks!
Fran,
Ditto!
(sleepy) Mike in Tucson
Ross,
This program is for any loan. FNMA (Fannie Mae) is not FHA. The qualifications are listed in the article. In order to qualify, you have to (1) be behind in your payments, and (2) show that you will be able to resume timely payments once your past due payments and costs have been paid by this new loan.
Mike in Tucson
WOW, WOW, WOW, Active Rain has done it again. This is the Best information I have heard in awhile. I will pass this on, o' boy will I. Thanks for the Blog Great Information.
Ronell D. Moore
http://www.ronellmortgage.com/
I just visited FNMA's website. It looks like a great program! Hopefully it will help some deserving folks out.
Thanks for the timely info. Man, this is getting out of hand - what keeps the bwr that is barely making throw up his/her hands and say, "I am going to skip a few months...but, it's okay, I will be current in no time!"
I understand the intent of avoiding the foreclosure process with these bwrs, but isn't it inevitable? Why is the bwr all of a sudden going to be capable, or even motivated to making future on-time payments?
Jeff,
A borrower called from Illinois the other morning. She and her husband bought a new home, and the loan officer didn't explain that the taxes would take a sizeable jump in a year or so when the valuation process at the county caught up. When the bank got the tax bill, they paid it, and hit the escrow account with the difference. It happened at Christmas, or just after, and the borrowers have three 30 day lates. It's a rolling 30 days, but the bank sent a notice of foreclosure. This program will reinstate them and allow them to stay on top.
Matt,
Thanks for commenting!
Sohail,
I talked with FNMA today, and the program is in pilot with Wells Fargo and a couple of other big servicers. Its full rollout is delayed until May.
Randall,
Thanks for stopping by!
Ronell,
Active Rain is a great community. Thanks for commenting.
Mike in Tucson
Great post! Didn;t know this was an available. Should help a lot of people in need of some help.
FHA's MIP program will generally help FHA borrowers in that it can be used to bring a delinquent mortgage up-to-date. For more ideas about how HUD can help for FHA mortgages, go to http://portal.hud.gov/portal/page?_pageid=33,717348&_dad=portal&_schema=PORTAL
Joseph, Lewis, Kevin and Don,
It's a work in progress. FNMA now says the program is in Beta, and will be rolled out in May. From what I'm finding out, the borrower has to be able to show that they will have $200 in disposable funds AFTER being brought current and paying the personal loan.
Mike in Tucson
This sounds like a great program! I personally will help any of my old clients who need the help... Although the paper that I write generally Performs so I don't think that I will need this program very much. Still it is nice to know that there are programs like this out there. One thing that I am curious about (will research it) is; in Fannie's description of what the program it it says "HomeSaver Advance is designed for qualified borrowers who have fallen behind on their mortgage"... Once someone falls behind on their payments or even has one 30 day late they typically do not qualify for conventional financing. Are there separate qualifications that Fannie will apply to this type of a transaction? In other words if someone is 90 days late does that automatically disqualify them or will they still be able to benefit from the program?
Chris,
Actually, the borrower MUST be behind on the mortgage in order to qualify. Lates are a requirement! What they must be able to show is this: Once the mortgage has been reinstated, and the borrower is again current, they will have a new payment for the personal loan from Fannie Mae. They have to be able to show income sufficient to meet this additional payment, AND have discretionary income left over in the amount of $200. per month.
Mike in Tucson
Mike... I was pointed over here from Bill Archambault. In any case, sounds like a great program. But don't ever assume anything. The loan will not allow you to cover late fees. Don't assume that all banks will allow you to pay this balance off and waive the late fees. I know some are stingy, for some dang reason. And think about this.... why do these companies or people come out with these programs, but don't make them 100% easy???? They give you money as a loan to get out of the whole, but it can't be used for late charges??? Does that really make sense? It's like the FHA secure loan.... you can't do anything until your adjustment and you have to be late after the adjustment, not prior... well, the rate is higher on the FHA secure loan. And those that are truly in trouble are usually in trouble before the rate adjustment... lol
And you even listed income requirements and such.... and discretionary income..??? Not everyone will have that....
Jeff,
Don't you wish sometimes you could throw a switch and make things make sense? Thanks for a thoughtful comment! It's good to see you on my blog.
Mike in Tucson
Laura,
I don't know. Fannie Mae will have more info by the end of May.
Josh,
Thanks for commenting!
Mike in Tucson
Hey guys great info posted here. I just received my paperwork for the HomeSaver Fannie Mea, my question is my delinquint total is $4770 , that they are lending me over 174 weeks , my question is does this amount reflect the ESCROW amount that I am behind , in other words does this program also pay the Escrow money that is due? . please let me know .
Thank You
Sam
Sam,
I don't know if the program loans you money for taxes and insurance (escrow). If someone else knows the answer, please comment for Sam.
Mike in Tucson
Great post Mike - looking forward to your follow-up to this!
Don,
Fannie and Freddie are about to collapse, but there will not be a negative effect on the borrowers. Just the stockholders. That may be the subject of today's post.
Mike in Tucson