If you follow real estate, politics, or life in general, you have probably heard about the latest effort to help support this vital market.  A new program launched on March 4th will offer help to many who have to who have not been able to take advantage of the low interest rate climate because they no longer have the required amount of equity in their property.  Although the program was launched effective immediately, most lenders are still trying to work out details of the implementation.  I have seen memos from some who expect to begin accepting applications  on April 4th.  Some of the details are likely to change between now and then but here are some of the guidelines as we know them.  There are actually two parts to the program.  the first part is a simple refinance of an existing FNMA program. For this program here is what we know:

• The existing loan must have been originated on or before January 1, 2009.
• The existing loan must be  held or guaranteed by FNMA or FHLMC.
• The program applies only to First-lien loans on owner-occupied properties.
• All borrowers must fully document income to qualify. No new borrowers may be added to qualify.
• The new loan amount can be as high as 105% of the current value of the property, not to exceed $729,750.
• No cash out will be allowed on the new loan.

The second part of the offering will allow certain borrowers to modify their current loan to reduce the monthly payment.  In addition to the above guidelines the following will apply:

• The modification will attempt to yield a payment equal to 31% of the borrowers documented income.
• You will not be required to be delinquent to qualify as is the case with many of the previous modification programs.

Many details have not yet been released such as pricing and cost structure of the new loans.  We do expect that this program will draw a tremendous response to we encourage you to speak with your favorite lender right away to see can be done to give you a jump on the rush.

We will keep an ear to the ground for news and developments. I will try to post them here as soon as we get them.

Sincerely,

Bill Fletcher

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