Part of the acceptance criteria for mortgage refinancing under the ‘make home affordable’ plan was that the new mortgage could not exceed the current value of your home by more than 5% (i.e. 105% ).  That has proved to be a number that was not a workable level and so the criteria has been extended to 125% recently so that more people qualify.

Although this is a more practicable acceptance criteria in the spirit of the program, the level is getting a little scary in terms of the loan to value ratio and is starting to smack of what got us all in this mess in the first place. At the end of the day the intention is that the repayments need to be sustainable and the loan ultimately needs to be paid off.

For that reason I suspect that this will be the only increase that will be done so if you still don’t qualify I wouldn’t hold my breath, you may have to wait until house prices rise again to see yourself in line for the program and right now who knows when that will be for sure.