Foreclosing your home is a long process and contrary to popular belief, there are ways to avoid foreclosure. Lenders don’t want to foreclose on a property, they want to keep the homeowners in their homes. The Obama Administration has implemented a number of programs under the Making Home Affordable plan. These programs seek to assist homeowners who are at risk of foreclosure or are struggling to make monthly mortgage payments.
Refinancing your Mortgage
Refinancing your mortgage can help to lower mortgage payments to a more sustainable level. Refinancing your mortgage can secure a lower rate, longer term or a different type of loan.
1) Home Affordable Modification Program (HAMP): HAMP sets out to lower mortgage payments to 31% of your income before tax to make mortgage payments more affordable for the homeowner. This program is for those homeowners who are still employed but struggling financially to keep on top of their mortgage payments.
2) Principal Reduction Alternative (PRA): If your home is worth significantly less than what you owe on your mortgage, PRA sets out to encourage lenders to reduce the amount you owe.
3) Home Affordable Refinance Program (HARP): HARP is set up for those who are current on their mortgage payments but are not eligible for traditional refinancing due to a decline in the value of their home. The program sets out to help homeowners get a new, more affordable, more stable mortgage.
With the decline in value within the real estate market, many people are finding they now owe more on their mortgages than their home is worth. Along with the HARP & PRA programs, homeowners with underwater mortgages can apply for the Treasury/FHA Second Lien Program (FHA2LP).
4) Treasury/FHA Second Lien Program (FHA2LP): FHA2LP is for those who have 2 mortgages with different lenders, with one agreeing to participate in FHA Short Refinance. If that is the case then FHA2LP sets out to have your second mortgage provider do the same resulting in a maximum mortgage debt after the refinance of 115% of your home’s current value.
Many homeowners have been made unemployed since the recession. Their struggle to maintain their mortgage payments have led to thousands of people foreclosing on their homes. Now the MHA has set out to ensure unemployed homeowners are given the chance to search for employment and keep their mortgage and home.
5) Home Affordable Unemployment Plan (HAUP): For those unemployed, HAUP will reduce your mortgage payments to 31 percent of your income or suspend them altogether for 12 months or more, depending on your situation.
6) FHA Forbearance for Unemployed Homeowners: The Federal Housing Administration (FHA) requirements now require servicers to extend the forbearance period for unemployed homeowners to 12 months.
Getting out of your mortgage
Some homeowners find they reach the point where they need to get out of their mortgage due to prolonging unemployment and crippling financial situations. The MHA will allow you to get out of your mortgage through the Home Affordable Foreclosure Alternatives and even offer the opportunity to buy your home back.
7) Home Affordable Foreclosure Alternatives (HAFA): Those who find their mortgage payments unaffordable and are looking to move to more affordable housing may be eligible for short sale or deed-in-lieu of foreclosure through HAFA SM. In a short sale, the mortgage company lets you sell your house for an amount that falls “short” of the amount you still owe. In a DIL, the mortgage company lets you give the title back, transferring ownership back to them.
8) Redemption: After your home has been sold at a foreclosure sale there is a period of time when you can still reclaim your home. In order to do this you will need to pay the outstanding mortgage balance and all costs incurred during the foreclosure process.
Another Chance Nevada
Those that find themselves foreclosing on their property often think that they cannot get another mortgage. However Premier Mortgage Lending offers a Second Chance Loan Program which helps those wanting to purchase a home do so with their access to both private money and institutional portfolio lending. Through their extensive access to both private money and institutional portfolio lending they are able to help you to secure financing even with a recent history of foreclosure or short sale.