With the housing market still shaky, and many people underwater in their homes, it’s important to know that there are still options to explore besides foreclosure or a short sale. The Obama Administration’s “Making Home Affordable” program, is a broad strategy for helping keep American’s in their homes by offering multiple ways for homeowners to better their situation.
While complex, the Making Home Affordable Program (http://makinghomeaffordable.gov) basically offers home owners four different types of relief, depending on their situation:
(1) refinancing mortgage loans through the Home Affordable Refinancing Program (HARP)
(2) modifying first and second mortgages through the Home Affordable Modification Program (HAMP) and the second lien modification program (2MP)
(3) providing temporary assistance to unemployed homeowners through the Home Affordable Unemployment Program (UP)
(4) offering other alternatives to foreclosure through the Home Affordable Foreclosure Alternatives Progam (HAFA).
“Home owners who find themselves in a situation where they are having difficulty making their payments can take advantage of these historically low rates even if they are underwater, or are otherwise in less-than-optimal financing situations. Everyone should contact their loan servicer to see if they are eligible for any of the Make Home Affordable programs, while they are still available,” said Todd Seabold, VP and retail sales manager, Beverly Hills Bank of America Home Loans.
There are mulitple eligibility requirements depending on the program you apply for, however, in general, you need to have met your mortgage obligations for the past 12 months, owe no more than 125% of your home’s current market value on your first mortgage, and have your loan owned by Freddie Mac or Fannie Mae.
“Until you have sold your home for less than the purchase price, you haven’t truly experienced a loss. It’s worth taking the time to research all options available before attempting to short-sale or risk going into foreclosure,” commented Seabold.
Even if you’re in a good position with your current mortgage, it might be worth refinancing through one of these programs to reduce your interest rates and/or your monthly payment. If you feel you might benefit from the Making Home Affordable program, it’s well worth a call to your lender to explore your options.
Over the course of a few articles, I’ll explain in more detail how each of these programs work and some of the specific eligibility requirements.