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Foreclosure Assistance: Government Programs

 

With a massive housing crisis affecting much of the nation, the United States Government had to step to the plate and develop some programs to assist families who were being displaced right and left from their homes. Some of the programs are designed to ward off  foreclosure, others are loan modification programs to help consumers whose housing situation turned upside down, meaning their home mortgage is now more than their home is worth.

Government Foreclosure Assistance Programs Available:
  • Making Home Affordable
  • Hope For Home Owners
Making Home Affordable

In a press release from May 2009, With the Making Home Affordable (MHA) program delivering much-needed relief to homeowners and to our economy just over two months after the release of program guidelines, Treasury Secretary Tim Geithner and Housing and Urban Development (HUD) Secretary Shaun Donovan today provided an update on the program’s impact on stemming the housing crisis and keeping families in their homes and announced new options for homeowners facing foreclosure.

They went on to say, “In just over two months, the Making Home Affordable program is up and running, helping our economy recover and making a difference in the lives and livelihoods of thousands of American homeowners.  Historically low interest rates are allowing Americans to refinance and save money, and modifications are helping homeowners avoid foreclosure, said Secretary Geithner. Today we are announcing a new program component to help homeowners obtain modifications in areas suffering from home price declines.”

Hope for Homeowners

In a press release from the US Department of Housing and Urban Development, they outlined a new program for Hope for Homeowners. “U.S. Housing and Urban Development Secretary Steve Preston today announced that the HOPE for Homeowners (H4H) Board of Directors has approved changes to the program to help more distressed borrowers refinance into affordable, government-back mortgages. The changes will reduce the program costs for consumers and lenders alike while also expanding eligibility by driving down the borrower's monthly mortgage payments.”

The key components to the Hope for Homeowners program are:

“Increasing the loan to value ratio (LTV) to 96.5% for some H4H loans;
Simplifying the process to remove subordinate liens by permitting upfront payments to lienholders; and
Allowing lenders to extend mortgage terms from 30 to 40 years.”

If you are struggling, remember that real estate law is complicated and can vary from state to state. It is important to speak with a foreclosure attorney who specializes in real estate law before making any hasty decisions. Whether you are a homeowner, landlord, or tenant, Whocanisue.com can help you find an experienced real estate attorney.

The government continues to try to overhaul the mortgage crisis and provide options to homeowners. In a blog post in February 2009, they said “Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan.

Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities,” and “Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify.  The current value of your property will be determined after you apply to refinance.”

Another component to the government assistance plans is a new regulatory agency called the Consumer Financial Protection Agency (CFPA), which would oversee consumer lending in the United States. The creation of this agency is an attempt to avoid the pitfalls that have recently riddled the US banking system. The CFPA would oversee credit cards as well as mortgage loans.

For homeowners still struggling with their home mortgage loans, government assistance can seem too little and a little too late for some. If you are facing foreclosure, contact an experienced attorney who is knowledgeable in foreclosure law to assist you with determining your options. If and when you contact an attorney, it is important to make sure they are familiar with the type of home mortgage you have because there are many various types of home mortgages.

Real estate law is complicated and can vary from state to state. It is important to speak with a foreclosure attorney who specializes in real estate law before making any hasty decisions.
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