There are several options to help those facing foreclosure from the government-backed agencies Fannie Mae and Freddie Mac under President Obama’s Making Home Affordable initiative, according to the U.S. Department of Housing and Urban Development. Several modification programs allow borrowers to lower monthly mortgage payments and stop federal foreclosure proceedings.Continue Reading
The Home Affordable Refinance Program, known as HARP, helps borrowers who owe more money than their homes are worth, explains MakingHomeAffordable.gov. The term “underwater mortgage” refers to homes with appraised values that are far less than the mortgage loan, and borrowers do not possess the ability to refinance their home. To qualify for assistance, borrowers must be current on their mortgage payments. The program helps borrowers who would rather default on their mortgage and go into foreclosure than continue to pay for homes with little or no value.
The Home Assistance Modification Program, known as HAMP, assists borrowers who are delinquent on their mortgage payments and facing foreclosure, as MakingHomeAffordable.gov details. The program helps those whose interest rates rose during the housing crisis, causing their monthly mortgage payments to skyrocket. The program also helps those devastated by income reductions due to job losses or other factors. Eligibility criteria for HAMP includes financial hardship and a mortgage that closed on or before January 9, 2009, that is in default. Borrowers facing foreclosure may apply for the Making Home Affordable modification and assistance programs through their current lenders.Learn more about Credit & Lending