What is financialstability.gov? How does it help me save my home?

17 Mar What is financialstability.gov? How does it help me save my home?

Financialstability.gov is a website which describes President Obama’s plan to assist some homeowners as well as a lot of other financial initiatives. According to the site, it’s “coming soon.” It’s vaporware and I wish it were more concrete already.

The two plans sponsored by the government to help homeowners have been called the HAR plan and the HAM plan. HAR stands for “Home Affordable Refinance” and HAM stands for “Home Affordable Modification”

These programs can help some people but not everyone. The refinance program is available to those who have Fannie Mae (FNMA) or Freddie Mac (FDMC) mortgages. It will help people whose first mortgages are less than 105% of the fair market value of the home.

Fannie Mae and Freddie Mac are developing online tools which will allow you to find out whether your mortgage is covered. This tool is supposed to be available in March according to information at the Home Affordable Refinance link mentioned above.

The purpose of this HAR program is to allow some people to get out of Adjustable Rate Mortgages or other toxic mortgages and into a stable sustainable mortgage. It can help some people but not everyone.

It’s the same with the Home Affordable Modification plan. This plan gives financial incentives to lenders and mortgage servicers (the people you make payment to – like Ocwen or Litton Loan Servicing for example) to enter into loan modification agreements. I don’t think these will be all that helpful. You might be able to stay in your home for a while longer, but these modifications won’t reduce the amount you owe. You may still owe a lot more on your house than it’s worth. You’d have to decide if that’s worth it to you.

More about this in future posts.

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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