4 Programs That Will Help Stop Your Foreclosure


Find A Mortgage Relief Program That Can Help You

Since the financial crisis hit in September 2008, over 5.2 million foreclosures have been completed nationwide. That’s a lot of people who have lost their homes due to financial troubles. However, that staggering number could have been more than double that amount had the Federal government not established the Making Home Affordable (MHA) program to support and assist struggling homeowners in finding relief through mortgage modification and refinancing. Launched in 2009, the MHA is an official program of the Department of the Treasury in conjunction with the Department of Housing and Urban Development (HUD). An initiative of the Obama administration, the program is designed to not only help homeowners retain their homes, but also to strengthen the housing market and improve the economy. MHA offers 12 different programs to meet and solve the various situations people might be facing, but here is an overview of a few of the more popular programs offered:

1. Home Affordable Modification Program (HAMP)

If you are suffering from financial troubles due to a reduction of income or medical expenses, you may be eligible for a mortgage modification through HAMP.  The program works with lenders to make mortgage payments more manageable throughout the remaining period of the loan. There is no upfront fee for this program, and it offers the incentive of financial aid from the government if monthly payments are paid on time.

2. Home Affordable Refinance Program (HARP)

Homeowners who are current on their monthly payments, but whose home’s value has declined, may refinance through HARP. While the program requires an application and underwriting, as well as payment of refinance fees, it does help make mortgage payments more affordable if you do not have enough equity for traditional refinancing. SEE ALSO: HARP Versus HAMP: One Letter, One World Of Difference

3. Home Affordable Unemployment Program (UP)

There is currently over 12 million unemployed Americans, and those who are in need of mortgage assistance may find relief with UP. Depending on your situation, the program can reduce monthly mortgage payments to 31 percent of your income. In extreme cases, payment can even be deferred for one year or more, giving you time to find a stable income without losing your home.

4. Home Affordable Foreclosure Alternatives (HAFA) Program

The HAFA program is designed for homeowners who are unable to afford their current mortgage payments and want to move into more affordable housing. HAFA allows homeowners to do that by either putting their house on short sale, or transferring the ownership of the home to the mortgage company. Whichever option the homeowner chooses, HAFA offers benefits to make the transition as favorable as possible. This includes free advice from HUD-approved housing counselors and up to $3,000 in relocation assistance.

Other Programs

As mentioned earlier, Making Home Affordable includes 12 beneficial programs to suit different, individual needs. Like the ones already listed, these programs offer solutions like refinancing, mortgage modification, interest rate reduction, and deferred payment, all to help distressed Americans avoid foreclosure. Other programs you might be eligible for include:
  • Principal Reduction Alternative (PRA): Geared toward those who owe significantly more on their mortgage than the home is worth
  • Federal Housing Administration (FHA) HAMP: Available for those with a FHA loan
  • Veteran’s Administration (VA) HAMP: Available for those with a loan insured by the Department of Veterans Affairs
  • United States Department of Agriculture’s (USDA) Special Loan Servicing: For homeowners with a loan from the USDA’s Section 502 Single Family Housing Guaranteed Loan Program
  • FHA Refinance for Borrowers with Negative Equity (FHA Short Refinance): An FHA loan intended for homeowners who are not behind on their mortgage, but owe more than the home is worth
  • Second Lien Modification Program (2MP): For those having trouble keeping up with payments for their second mortgage, HELOC, or home equity loan
  • Second Lien Modification Program for Federal Housing Administration Loans (FHA-2LP): Homeowners who received a FHA Short Refinance on their first mortgage may be able to get the same reduction on the second mortgage of the same house.
  • Hardest Hit Fund (HHF): This fund is available for U.S. homeowners living in the states that have been hit the hardest by the economic crisis.
SEE ALSO: Principal Reduction Alternative For Underwater Homeowners If you are a homeowner struggling to make your monthly mortgage payments, the Making Home Affordable program may provide the relief you need. The program was developed to prevent as many Americans from losing their homes as possible, so gather your mortgage and income documentation and explore which best benefits your situation. You have until December 31, 2016 to apply.
Date of original publication:
Updated on: November 10, 2015

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