Today, the Obama administration announced an expansion of the Making Home Affordable plan, which gives homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments.
Housing and Urban Development Secretary Shaun Donovan announced that the program now covers homeowners who are current but up to 125% underwater on their mortgage. Previously, only those homeowners who were 105% underwater qualified, so this opens the door to a significant number of additional people who need help. According to our analysis of the Q1 Zillow Real Estate Market Reports, that means up to 36% of all homeowners with mortgages, or 20.1 million households, could now potentially qualify for the plan. However, a requirement for this program is that the loan must be backed by Fannie Mae or Freddie Mac. Check if your loan is backed by Fannie or Freddie here.
It seems that the official Making Home Affodable Web site, however, still has the old 105% number on their refinance eligibility tool. Hopefully someone will update this soon.
If you are underwater on your mortgage, a great way to find someone who may be able to help you refinance is by submitting a loan request–anonymously–through Zillow Mortgage Marketplace. Your request will be posted to the marketplace, where thousands of lenders can assess your situation and provide you with custom quotes if they are able to help you.