Will New Obama Refi Plan Protect American Dream

by Jeff in Duluth, by George in Modesto, and by Patrick and Debra in Las Vegas

August 2013 National Mortgage News! Obama Underwater Refinance Plan to Protect American Dream: President Obama has released an update to the withering HARP 3 proposal. Titled A Better Foundation for Middle Class Homeownership, it offers a better bargain for underwater homeowners. The plan is to strengthen the housing market and and the same time prevent struggling homeowners from being left behind in the resulting recovery.


Secondly, the plan states it will reform the housing finance system, and thirdly, make mortgages safe and simple.

I'll give you additional details to the Obama Refinance Plan in a moment, following these three Ask Kate letters from underwater homeowners. In fact, each letter clearly illustrates why our elected politicians need to get off their duffs and give us an actual, honest-to-goodness, viable plan to save American homes threatened by foreclosure.

National Mortgage News! Obama Underwater Refinance Plan to Protect American Dream

Not feeling so interested in this mortgage news? Well, even if your real estate market is heating up or your mortgage is not underwater, you will reap the benefits of a new HARP 3 plan. Why? As it stands now, the good deals on foreclosed homes are being snatched up by overseas investors. And that bodes poorly for the future of American homeownership and our country.

Question 1: Underwater But Don't Qualify for Government HARP

By Jeff G. in Duluth, GA

Kate: My mortgage is not owned by Fannie or Freddie, and is now serviced by Ocwen ( originally by Litton ).

I owe $125,000, value is now at $67,000, I am locked in at 9%, and my mortgage payments are on time.

I have been turned down 3 times for HARP refinance or HAMP modification by Litton and Ocwen because I apparently have the ability and inclination to make the mortgage payment on time. I have consulted local experts who say unless I can get the loan-to-value down to 125% there is nothing that can be done.

Is there anything that can be done short of walking away? Thank you

***zz-portrait-left.shtml*** Ask Kate answers: Underwater But Don't Qualify for Government HARP

Hi Jeff,

It's a sad state of affairs when homeowners such as you are left no recourse other than foreclosure.

Read about the HAFA, Home Affordable Foreclosure Options but also please write President Obama, Congress, and state officials so many times that they recognize your name.

After the additional two Ask Kate letters on this page, I will follow with more details on the new Obama refinance plan to save the American dream. Please also follow my blog for breaking news on underwater refinancing.

Best wishes,


Question 2: Refinancing 7 Year Balloon Underwater Mortgage

By George B. from Modesto, CA

Hello Kate, We have a very unusual mortgage situation. Our loan is serviced by Chase, owned by Deutsch Bank. It is not Fannie or Freddie backed. Not an FHA. The value is around 380k and we owe approximately 405k.

Recently I found out it is also a 15 year balloon loan, and in 7 years we owe the remaining balance in one lump payment!

We've never have been late with payments but it seems we are not eligible for any of the current programs: HARP 1 and 2, HAMP, FHA Streamline and any other, since it is investor owned. However, I read somewhere if your mortgage is a balloon mortgage, then maybe it can be refinanced.

Would having a balloon mortgage in itself make us eligible, or would it have to be backed by one of the government programs in addition to the balloon loan?

***zz-portrait-left.shtml*** Ask Kate answers: Refinancing 7 Year Balloon Underwater Mortgage

Hi George,

As far as I know, Fannie states that balloon mortgages are eligible for HARP refinancing. But that does not include mortgages programs that are not government sponsored entities (GSEs) such as Fannie Mae and Freddie Mac. Verify this with your loan servicer though to be safe.

In addition, write the President, elected officials in WDC, and your local state politicians until they know who you are.

Also check in often with my blog for underwater refinancing updates.

Best wishes,


Question 3: HAMP 2.0, HARP 3.0 or other refi options?

By Patrick and Debra P. from Las Vegas, NV

Hi Kate,

We desperately need to lower our monthly mortgage payment. Our loan is guaranteed with Fannie Mae. We did refi with the HARP program in April of 2009, which seems to eliminate any HARP or HAMP options going forward.

Our mortgage was carried by Bank of America, but when we missed a payment in September of last year they sent us to a collection agency (Seterus). We have since made up that missed payment and are current.

The problem for us is our current monthly payment takes well over 30% of our monthly income. It's becoming more and more difficult to keep up with all our monthly bills (i.e. air conditioning in Vegas this summer). We have resorted to Credit Cards to pay bills, but are now at limit on most.

We would gladly sell this home, but are close to underwater and originally we hoped for it to have equity and be part of our retirement. Home values are slowly coming back here, but we don't know if we will be able to hold on long enough to sell our home conventionally and recoup some equity.

We may have to Short Sell, but don't really want to do that. Do you have any recommendations? Are there any other options for us?

***zz-portrait-left.shtml*** Ask Kate answers: HAMP 2.0, HARP 3.0 or other refi options?

Hi Patrick and Debra,

One of the HARP 3 proposals has addressed the arbitrary decision of limiting properties to one HARP refinance. You are a perfect example of a homeowner who needs to re-HARP.

You can read more about this at HARP 3 Responsible Homeowner Refinancing Act of 2013 by US Senator Robert Menendez of New Jersey.

But if you are hanging off the edge of the foreclosure cliff, I don't necessarily recommend waiting for the Obama refinance plan. Besides reviewing the HAFA program options (See my first answer to Jeff above), call your loan servicer immediately to discuss the HAMP loan modification program. See HAMP Tier 2 Loan Modification Program for more information.

Best wishes,



New Obama Refinance Plan to Protect the American Dream

August 2013 National mortgage news: Obama discusses HARP 3 plan
Now back to more mortgage news on the Obama refinance plan to save the American dream...

Besides that President Obama estimates that the average homeowner could save $3000 a year under his refinance plan, he also says it's time to build a new housing finance system that works.

This includes putting an end to the failing Fannie Mae and Freddie Mac (ya think?) and promoting private capital for mortgage lending.

Lastly, the latest Obama plan for underwater financing promises to create simplified mortgage disclosure forms and level the playing field for community-based banks.

But here's my problem with yet another plan. What does this announcement mean in actuality to the struggling homeowner trying to save an underwater home? Is this just another proposal for political gain or will it materialize into a practical plan?

That's why I say, you must write President Obama and make your specific voice with your unique story heard!

Go here for an easy and quick way to get the job done! How to Contact Washington DC and Your State Government. Remember, no one can tell your story as well as you. Ask for concrete action.

Regardless of your political beliefs, America needs mortgage reform. But if we don't ask for it, we'll never see it. Please go for it. ***zz-newsletter.shtml*** ***zzz-link-harp-news.shtml***

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