The Obama Administration’s current effort to assist people with housing, the Making Home Affordable Program. This provides opportunities to modify and refinance mortgages to make them more affordable. Counseling is available for homeowners wanting to access the assistance and is free of charge. It also addresses the needs of homeowners who opt for a short sale or deed-in-lieu of foreclosure. To qualify for MHA, the mortgage payments must be at least 31% of total household income.
On August 11, 2010 Administration announced two targeted programs to provide additional assistance for people in financial difficulty because of unemployment. First, through the Hardest Hit Fund (the HFA agency for the Hardest Hit), the administration has made available an additional $2 billion in 17 states and the District of Columbia for those struggling to make mortgage payments due to unemployment. The Hardest Hit Fund was announced in February 2010.
The Hardest Hit fund is targeted to states that have experienced unemployment rates at or above the national average over the past twelve months. The states are to use these funds to help struggling homeowners pay the mortgage while seeking employment or obtain retraining for a new job.
In addition, $1 billion has been made available for to assist homeowners facing foreclosure due to unemployment for up to 24 months. This is named the Emergency Homeowners Loan Program. It will provide assistance to people who are outside the areas targeted by the Hardest Hit Fund and are facing foreclosure due to unemployment.
Homeowners can borrow up to $50,000 in a non-interest, no recourse loan for up to two years. To be eligible, the must be at least 3 months delinquent in their payments but show that with the added help they can meet their mortgage obligation; not have a second home and be living in the mortgaged property; and show a good payment record prior to the event that precipitated their financial difficulties.
The administration’s website provides a mortgage reduction calculator for homeowners to try at http://makinghomeaffordable.gov/payment_reduction_estimator.html.
The site also warns homeowners to beware of scams that purport to provide assistance through the mortgage modification or other programs. Signs to look for are;
a fee associated with assistance or information related to the Making Home Affordable Program. Services are free.
any fee associated with counseling or a modification program
a person who asks you to sign over the deed so they can “save” your home
anyone who asks you to make mortgage payments to them instead of your mortgage company
a person or company guarantees they can get your mortgage modified or stop foreclosure
anyone who asks you to release personal information over the phone or internet
Anyone who believes they may have been targeted for a scam should immediately contact their mortgage servicer and seek help. They should also call a HUD- approved counselor through the Homeowners HOPETM Hotline at 1-888-995-HOPE (4673).
To benefit from the government’s efforts at supporting the fragile housing market and assisting homeowners, use caution, go to an official government (.gov or.org on the internet) source, and get accurate information.
References and further information:
http://makinghomeaffordable.gov/
http://portal.hud.gov/portal/page/portal/HUD/program_offices/cfo/stratplan/HUD_Strategic_Plan_C_goal1.pdf
http://www.loanscamalert.org/