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You'll have more time to seek a mortgage modification under the Home Affordable Modification Program, or HAMP. And maybe your lender will be more likely to write down principal.
HAMP's expiration date has been extended one year, to the last day of 2013, the Treasury Department announced this afternoon. Treasury announced other changes, too:
• Treasury will pay Fannie Mae and Freddie Mac for forgiving principal on mortgages they own. Fannie and Freddie don't offer principal reductions, according Treasury's Timothy Massad. No word on how much these incentive payments would be; certainly they would be partial. For example, Fannie might be paid $5 for every $100 it forgives. It's not a lot, but maybe it beats foreclosing.
• Treasury will triple the incentives it pays to investors besides Fannie and Freddie. They'll be reimbursed with anywhere from 18 percent to 63 percent of the amounts they forgive.
• Modification guidelines will be relaxed to take into account debt such as medical bills and home equity loans.
• Houses occuped by renters will be eligible for HAMP modifications.
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Ok folks...big news has just landing. Those who reside in high cost counties aka known as Hardest Hit Areas can maybe, just maybe have their second liens included in DTI requirements. This 31% business only including first liens was a non starter for many. Banks were smart, they had folks take at huge seconds to qualify, which up to this point have not even been on the Obama housing recovery radar. Gotta include those seconds and hit that 31% gross dti and people will be much more likely to stay in their homes...which for all those haters, benefits you too...indirectly of course.