New Government Mortgage Help Programs

With our economy as bad as it’s ever been since the Great Depression, more and more homeowners are having difficulties with their mortgages on a daily basis. It’s not uncommon for masses of people in one area to be unemployed, have a serious reduction in their income, or have some other bad financial hardship these days.

This is why many programs have been made under the Obama administration, to help homeowners to get affordable monthly mortgage payments and stay in their home. Many of these programs such as the HAMP program, are failing to meet their estimated quota of homeowners who get accepted into their programs. Even so, that doesn’t mean everyone gets denied from these programs.

It’s important to know the facts about these programs, so that you may work hard to get accepted under the program that you need assistance from. Below are government programs and a description of what they do.

Home Affordable Refinance Program (HARP)

Under this program, homeowners who are current on their mortgage payments can refinance to get lower rates. Mortgage rates lately have been going up and down daily. However, mortgage rates are lower than they’ve been in years. HARP will allow you to take advantage of these low rates, so you may be able to get more affordable monthly mortgage payments.

People with two mortgages already can still qualify for HARP, as long as they meet all of the requirements. With two mortgages this includes not owing more than 125% of the mortgages current market value. HARP is not a program that you can be eligible for if you are at all delinquent on your payments. Mortgage insurance is only required for this refinance, if you currently already have mortgage insurance on your first mortgage.

How do I apply for a refinance under HARP?

Information that you’ll need to apply for HARP includes your monthly gross income information, recent tax returns, any junior lien mortgage info that’s on your house, Account balances and minimum monthly payments due on all of your credit cards and records of all debts such as student loans and ca loans.

You’ll of course contact your lender and tell them you want to apply for Home Affordable Refinance Program. Then you’ll fill out an application. They’ll need all of your information listed above to approve you.The program is to expire on June 10, 2011. Your refinance under HARP has to have a mortgage note date on or before that date.

You are eligible for HARP:

* If you own a one to four unit home
* For properties with loans on them owned or guaranteed by Fannie Mae or Freddie Mac
* When you’re current on your mortgage payments when you apply for the program
* If the amount you owe on your original mortgage doesn’t exceed 125% of the current market value of your property
* If you can pay the new mortgage payments with your income
* If you are up to date with your monthly mortgage payments

Home Affordable Modification Program (HAMP)

HAMP is a program started in 2009 under the Obama administration as program to help homeowners get loan modifications. When the program first launched, the plan was that four million homeowners would get loan modifications by 2012. But the passed year only about a million homeowners have gotten successful loan modifications. The problem that has been constantly occurring with this program is servicers constantly loosing applicants paperwork.

The program can be used by homeowners who are current with their mortgage payments and by those who are delinquent. However, here on LoanSafe we’ve seen thousands of cases where homeowners who are current don’t get a loan modification, and those who are delinquent on their mortgages have better luck getting a loan modification. The HAMP program can help homeowners facing foreclosure to avoid it. Foreclosure sales cannot happen while the loan is being considered for a modification or during the trial period. And if your not in the foreclosure process yet, a loan modification by HAMP may allow the qualified home owner to get lower monthly payments.

Eligibility requirements for HAMP:

By owning and living in a one to four unit home

When you have an unpaid principal balance that is equal to or less than:

- 1 Unit: $729,750

-2 Units: $934,200

-3 Units: $1,129,250

-4 Units: $1,403,400

If your first mortgage was originated on or before January 1, 2009

When your mortgage payment you pay on your first mortgage is 31% greater than your monthly gross income

If you can prove you have a financial hardship that has made your current mortgage payments unaffordable for you

Second Lien Modification Program (2MP)

This program is an additional program used by HAMP to help homeowners with two mortgages to lower both their monthly payments. Under the 2MP program, when a homeowner uses HAMP to modify their first mortgage, the servicer of the homeowners second mortgage has to offer to modify the second mortgage. So basically if you were accepted for a HAMP loan modification on your first mortgage, you’ll be able to get a modification on your second mortgage if your second mortgage lender is under the HAMP program.

Home Affordable Foreclosure Alternatives Program (HAFA)

Under this program, homeowners will be given alternatives to foreclosure. Two of the most common options under the HAFA program are short sales, or a deed in lieu of foreclosure.

Short sales are the selling of properties that are worth well below market value, and are sold when the homeowner can no longer afford the monthly mortgage payments. IN a HAFA short sale, the lender will approve the short sale before the home is listed. A short sale will be accepted as a full satisfaction by the lender.

How does the HAFA Deed-in-Lieu of Foreclosure work?

In a deed in lieu, the homeowner is handing over their property to their lender. In a case such as this your servicer will have full rights to resell the home to make up for the loss of what is left to be paid on the principal.

How can I be considered for HAFA?

Homeowners must be evaluated for HAFA within 30 days of the following:

* The borrower does not qualify for HAMP.
* The borrower does not successfully complete a HAMP Trial Period.
* The borrower is delinquent on a HAMP modification.
* The borrower requests a short sale or Deed-in-Lieu of Foreclosure.

Before servicers can evaluate homeowners for HAFA programs, they must consider homeowners for other loan modification programs.

How do I know if my loan is owned or has been guaranteed by Fannie Mae or Freddie Mac?
Ask your mortgage lender or servicer. Also, both Fannie Mae and Freddie Mac have established toll-free telephone numbers and web submission processes to make this data available. Homeowners can enter information to determine if either agency owns or guaranteed the loan. This information is not a guarantee of eligibility for a refinance under HARP, as other qualifying criteria must also be met.

For Fannie Mae:
1-800-7FANNIE (8am to 8pm EST)
www.FannieMae.com/loanlookup

For Freddie Mac:
1-800-FREDDIE (8am to 8pm EST)
www.FreddieMac.com/mymortgage

Additional information on Making Home Affordable programs can be found at this link:

http://makinghomeaffordable.gov/borrower-faqs.html#57