Due to the sub-prime mortgage crisis of 2008, many homeowners located in the Lehigh Valley are still feeling the effects. In some cases, property values have declined 35-50% from their peak in 2006.
Recently, a $26 billion deal was struck with the nation’s top banks such as Bank of America, Wells Fargo, J.P. Morgan Chase, Citigroup, and Ally. The deal has been in the works for over a year.
According the deal, $17 billion will go towards foreclosure relief efforts such as short sales and homeowner transitions programs. $3 billion has been allotted towards an underwater mortgage refiance program. The balance will go to federal and state governments.
Underwater Refinance Guidelines
Under the re-fi program, borrowers who have previously sought assistance in refinancing their homes that were underwater may finally be able to get some relief. In order to qualify for underwater refi assistance, the following criteria must be met:
- Your interest rate must be at least 5.25%
- Your principal must be less than $730,000.
- Your home must have closed prior to January 1, 2009.
- Your mortgage balance exceeds 100% of your home’s value.
- You are current on your mortgage payments.
- Your mortgage is not held by Fannie Mae or Freddie Mac. (HARP is the equivalent program for mortgages held by Fannie Mae and Freddie Mac.)
To see if you qualify for relief under the program, you should contact your loan servicing company for help.
Foreclosures Moving Forward
Prior to the settlement, lenders were slowing the pace of foreclosures that have already been filed due to the uncertainty surrounding the settlement. While the terms of this settlement were negotiated, many lenders were even putting a temporary halt on foreclosures. Now that the deal has been struck, lenders may move forward with more foreclosures on defaulted loans.
If you are located in the Lehigh Valley and you are facing or already in foreclosure, please contact me for a free consultation to discuss your options, call (610) 417-6345. Our office is located in Bethlehem, Pennsylvania.