HomeSaver Advance program has been announced by Fannie Mae for helping homeowners delinquent on their mortgages and will be available to all Fannie Mae servicers by April 15, 2008. This program is part of Fannie Mae's larger HomeStay initiative & is an excellent solution for borrowers who are in trouble due to temporary events like medical emergencies.
This program is for borrowers who are capable of continuing their mortgage & would be able to resume normal payments if the arrearage is brought current.
Through HomeSaver Advance program the corporation authorizes its servicers to provide unsecured personal loans which can enable borrowers to recover from payment defaults on Fannie Mae securitized or owned mortgage loans. This unsecured personal loan will have fewer up-front costs & could be put in place quickly.
HomeSaver Advance program will provide funds for payment of past due balances of PITI & also up to 6 months (in some instances twelve months) of HOA fees. Advances for attorney fees & escrow advances are also covered but late fees & few other costs are not eligible under this program.
For getting the funds, borrower has to sign a promissory note payable over a fifteen year term with five percent fixed rate of interest. Additionally, no payments are necessary during first 6 months nor does interest accrue in that 6 months period, so the HomeSaver Advance is amortized over a period of 14.5 years.
A delinquent borrower can get lesser of $15,000 or fifteen percent of the original unpaid balance. This amount is directly applied to arrearage & the borrower does not receive the funds in hand. The cost for the borrower will be the $600 workout fee which is to be paid to servicer.