How to prepare for President's mortgage relief plan
Reporter: Craig Smith
TUCSON (KGUN9-TV) - If you're worried about your mortgage, you probably sat up and took notice when the President announced a new mortgage assistance plan.
But how much will it help and how can you be sure you've pulled together what you need to apply?
The plan is meant to remove roadblocks that have stopped homeowners from taking advantage of earlier mortgage programs.
Earlier programs, for instance barred you from refinancing if your home's value had dropped too much compared to what you borrowed in your previous mortgage.
The plan is not open for business yet but we have some advice on how to be ready for it.
Past mortgage assistance programs only helped a small fraction of the homeowners in trouble. Often their home values fell so low, or their finances were so weak they couldn't qualify for help.
Now the President says he's using his own authority to offer plans with requirements easier to meet.
He says, "If you meet certain requirements you will have the chance to refinance at much lower rates, which could save you hundreds of dollars a month and thousands of dollars a year on mortgage payments."
To qualify your current mortgage must be held by one of the government backed lending pools, that means Fannie Mae or Freddie Mac and you must not have had a late payment in the last six months.
But Mark Tronziger of Fairway Mortgage thinks the new program may not mean much unless commercial lenders agree issuing new mortgages is a good deal for them.
"And so just because Uncle Sam comes out and says, hey we're gonna come out with this program, doesn't mean by any stretch that the individual lenders have to adhere to that."
Tronziger says if you will try to use the program to lower your mortgage it'll pay to start getting some documents ready for the moment the program opens:
You'll need to document what you make, what you owe, and your mortgage history.
So you'll need W-2s, your two latest tax returns, bank statements and current mortgage documents.
According to housing regulators about one million borrowers might be eligible. That's a lot of people but it's still about a tenth of the Americans in mortgage trouble.
If your mortgage troubles have hurt your credit, that could be a disqualifier. You will have to demonstrate you're a fairly good credit risk, with no late payments in the last six months, and no more than one late payment in the last year.