1 Making Home Affordable April 2009 | Making Home Affordable

2 Background April 2009 | Making Home Affordable Homeowner Affordability & Stability Plan Making Home Affordable Program Home Affordable Refinance Home Affordable Modification The Administration’s Plan Program for Homeowners Programs Available

3 Home Affordable Refinance Purpose - Gives borrowers the opportunity to refinance into more affordable loans at today’s lower rates – Only for borrowers with Fannie Mae or Freddie Mac loans Scope - An estimated 4 to 5 million borrowers are eligible April 2009 | Making Home Affordable

4 Refinance Eligibility Criteria Borrower – Owns and occupies a 1-4 unit property Is current on the mortgage Has sufficient income to support the new modified payment Loan is owned or guaranteed by Fannie Mae or Freddie Mac Amount owed on the first mortgage is not more than 105% of property’s current market value Refinance will improve the long-term affordability or sustainability of the loan April 2009 | Making Home Affordable

5 Home Affordable Modification Purpose - Modifies loans of qualifying at-risk borrowers to achieve affordable payments – Encourages participation from all parties through use of incentives Scope - An estimated 3 to 4 million borrowers are eligible April 2009 | Making Home Affordable

6 Modification Eligibility Criteria Owner-occupant of 1-4 unit property Amount owed on first mortgage is equal to or less than $729,750 Mortgage was originated on or before January 1, 2009 Monthly payment on first mortgage is more than 31% of borrower’s gross (pre-tax) monthly income Borrower has a mortgage that is not affordable April 2009 | Making Home Affordable

7 Modification Process The Servicer… – Determines if borrower meets minimum eligibility criteria – Obtains borrower income / expense information May rely on verbal information for trial period but will need to verify before modification – Calculates borrower’s debt to income ratio April 2009 | Making Home Affordable

8 Modification Process The Servicer… – Calculates new payment at 31% of borrower’s gross (pre-tax) monthly income – Performs internal test to determine whether it makes financial sense to the investor to modify the loan If yes, borrower enters 3-month trial modification Permanent modification occurs upon success April 2009 | Making Home Affordable

9 Modification Process To get to 31% DTI, the servicer must… – Reduce the interest rate to as low as 2% – If necessary, extend the loan term to 40 years – If necessary, defer a portion of the principal, interest-free, until the loan is paid off April 2009 | Making Home Affordable

10 Informative Video for Homeowners Needing Help Online Self-Assessment Tools for Home Affordable Refinance & Home Affordable Modification Easy-to-Use Main Navigation for Homeowners to Quickly Find Information On the Home Page, consumers can access:  Spanish Content  Consumer FAQs  Helpful Links in Footer  HOPE Sample Home Page April 2009 | Making Home Affordable

11 Are Lenders Required to Participate? If you have a Fannie Mae or Freddie Mac loan, yes. For other loans, participation is optional. However, significant financial incentives are being provided to encourage participation by borrowers, lenders and investors. To find out if your servicer is participating go to: April 2009 | Making Home Affordable

12 Beware of Rescue Scams Beware of any company that promises: – That it’s safe to skip your mortgage payments – That walking away from your house won’t affect your credit – They will buy your house & sell it back to you later –A specific result, for a fee April 2009 | Making Home Affordable There is never a fee for getting information about the Making Home Affordable program from your servicer or a HUD- approved housing counselor.

13 Additional Resources For Immediate Borrower Assistance: – Call HOPE (4673) Find a HUD-Approved Housing Counselor: – Visit Find Your Servicer’s Phone Number: – Refer to your monthly mortgage statement, or – Look up on April 2009 | Making Home Affordable