In these cases, where federal or proprietary home loan modifications are unavailable or unhelpful, unemployed homeowners may be able to participate in foreclosure alternatives programs which allow homeowners to surrender or sell their home and essentially be forgiven of their remaining mortgage debt. Short sale options, which have typically been used by homeowners in an underwater mortgage situation, and deed in lieu of foreclosure plans may be available to homeowners who have shown a previous ability to make the mortgage payment but, due to factors like unemployment, are simply unable to continue making home loan payments.
The Federal Housing Finance Agency (FHFA) released its Third Quarter 2010 Foreclosure Prevention Refinance Report on the status of loan modifications at both Freddie Mac and Fannie Mae. Loan modifications through the Home Affordable Modification Program (HAMP) reportedly increased 16 percent in the quarter, although the overall volume of loan modifications and the pace of HAMP modifications declined from previous periods.
The Home Affordable Modification Program (HAMP) was started in 2009 by the Obama Administration to bring forth a program to bring back financial stability to homeowners all over the country. The program addresses the major housing hardships that have been hurting our country, but like with sponsored programs, it has its flaws. HAMP was supposed to be designed to help lower homeowner’s payments by lowering their interest rate, changing the loan’s terms, and/or extending the length of the loan. However, now a year and a half into the program, we have observed failure much beyond what many expected.
Short Sale Program
Obviously, homeowners may still have to work with their mortgage servicer in some cases, but there or certain programs which offer grant-like assistance options to homeowners, borrowing opportunities for loans at 0% interest which may be forgiven, or even foreclosure alternative programs for homeowners who are simply in a situation where these assistants plans may not be beneficial. While homeowners may still contact their mortgage servicer to inquire about assistance, state housing agencies also have information regarding these state-specific programs which could be beneficial to homeowners in areas that are facing a greater than average number of home loan hardships.
- Obama Considers Foreclosure Ban, by Carrie Bay, Dsnews.com (oregonrealestateroundtable.com)
- Bad news on foreclosure, housing price front demands action from administration (dailykos.com)
- Home-Loan Assistance Tapers Off (online.wsj.com)
- Anna Cuevas: Hope For Homeowners: HAMP Trials and HAMP Tribulations (huffingtonpost.com)
- Here’s the Latest News on the HAMP Loan Modification Program (annarborundressed.com)
- Halt HAMP Now (trueslant.com)