(Or… What on Earth is an Affidavit of Financial Hardship?)
Today the U.S. Treasury announced the details of their “Making Home Affordable” Loan Modifications. This link to the financialstability.gov Web page about the plan should help you answer whether you are eligible to receive help with your “underwater” mortgage.
Here’s a good summary from a PDF linked from the above Web site that helps explain who the program is for:
The Home Affordable Refinance program will be available to 4 to 5 million homeowners who have a solid payment history on an existing mortgage owned by Fannie Mae or Freddie Mac. Normally, these borrowers would be unable to refinance because their homes have lost value, pushing their current loan-
to-value ratios above 80%. Under the Home Affordable Refinance program, many of them will now be eligible to refinance their loan to take advantage of today’s lower mortgage rates or to refinance an adjustable-rate mortgage into a more stable mortgage, such as a 30-year fixed rate loan.
The one thing I found while reading about this that I wasn’t familiar with is a requirement to sign an Affidavit of Financial Hardship. Googling for it resulted in a number of State-specific PDF forms, but I did find a generic Affidavit created by Fannie Mae so you can at least have an idea of what to expect.
Updated February 10, 2011 and originally published March 4, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.