Avoid foreclosure with home mortgage modification federal programs, refinancing programs and ways to exit your mortgage.
Millions of American homeowners are either using home mortgage modification federal programs to save their homes or have done so since 2009. If you are struggling to make your monthly house payment, you are not alone.
In an effort to continue to help homeowners keep their properties, the government has extended and expanded its programs that help people avoid foreclosure. One of these Making Home Affordable Programs (MHA) may help you get a federal loan modification, sell your home for less than you owe or exit your mortgage.
Federal government mortgage modification programs are so comprehensive that you will need an authorized housing counselor to advise you which option best fits your needs. Each home mortgage modification federal program is catered to a specific set of circumstances. For example, there are six different programs in which you can lower your monthly payments. To start your research, here is an overview of the main MHA programs and how they may help you.
Home Affordable Modification Program (HAMP)
The Obama Administration recently expanded this federal loan modification program to help more homeowners. If your property is not your primary residence, you didn’t meet HAMP’s debt-to-income ratio previously or you defaulted on HAMP trial payments or a permanent modification before, HAMP has solutions for you again. Also, HAMP has a special offering just for Federal Housing Administration (FHA) loans.
You can apply for HAMP if you meet these basic requirements:
- Your mortgage predates Jan. 1, 2009
- Your property is not condemned
- The mortgage does not exceed maximum amounts
- You are behind on your mortgage or will soon be
- Your income can support a modified payment
- You have not been convicted of certain felonies in the past 10 years
Second Lien Modification Program (2MP)
If you get a HAMP federal loan modification on your first mortgage, you may also be eligible for a modification or principal reduction on a second mortgage. The purpose of this home mortgage modification federal program is to make it easier to repay your primary lender. To qualify, both of your lenders must participate in MHA.
Home Affordable Refinance Program (HARP)
You can refinance a mortgage backed by Freddie Mac or Fannie Mae through HARP if you cannot get traditional refinancing. To apply, you must meet these requirements:
- You are not behind on payments
- The mortgage predates May 31, 2009
- You have a good payment history for the past year
- The home loan must have a loan-to-value ratio above 80 percent
- The mortgage was not refinanced by HARP previously, with one exception (see site)
Home Affordable Unemployment Program (UP)
UP can help you if you lost your job and receive unemployment benefits. This program may suspend your mortgage payments for a year or cut payments to 31 percent of your income. UP requires that:
- The house is your primary residence
- You have not received a HAMP modification
- Your mortgage predates Jan. 1, 2009
- You owe no more than $729,750 on your home loan
Home Affordable Foreclosure Alternatives (HAFA)
A home mortgage modification federal program may not fit your circumstances. HAFA helps you exit the mortgage through a short sale or a Deed-in-Lieu (DIL) of foreclosure if you cannot repay your home loan. Both options are better on your credit than a foreclosure.
Under HAFA, your mortgage lender lets you sell your home for less than you owe on it (a short sale) or give the title and property ownership back to the lender via DIL. The lender forgives the remaining mortgage debt in both cases. Plus, may qualify for up to $3,000 in relocation assistance.
Explore all the options of home mortgage modification via federal programs before you surrender your home. Talk to an MHA housing counselor and your lender about federal programs. A home mortgage modification is better for both lenders and homeowners. To explore refinancing possibilities, go to RealtyNow for mortgage lenders in your area.