Government Mortgage Relief Programs
The purpose of a mortgage loan modification is to get your monthly payment to a more affordable level. An “affordable” mortgage payment is typically defined as 31% of the borrower’s monthly gross income. This is achieved by modifying one or more components of your mortgage:
- Lowering the interest rate
- Extending the life of the loan
- Lowering the loan principle
Home Affordable Refinance Program (HARP)
Many homeowners pay their mortgages on time, but are not able to refinance to take advantage of today’s lower mortgage rates, mainly due to a significant decrease in the value of their home. A Home Affordable Refinance will help borrowers refinance their first mortgage even if the balance owed is more than 100% of the home value. For example, let’s say the amount you owe on your first mortgage is $500,000. You may be able to refinance even if the home value is now only $400,000.
Hardest Hit Fund (HHF) Programs
The US Treasury administers the Hardest Hit Fund, which provides aid to the states that were most impacted by the economic crisis. Each of these states have local agencies that help homeowners in various ways, including mortgage payment assistance for the unemployed, principal reduction, and transactional assistance. This helps people either afford the homes they’re in, or move to more affordable housing.
Back to Work Program
Under the federal Back to Work program, consumers who had a foreclosure, short sale, deed-in-lieu of foreclosure, or who declared bankruptcy may be able to get a new loan for a home if they are back to work and can document the extenuating circumstances.
Home Affordable Unemployment Program (UP)
The Home Affordable Unemployment Program reduces or suspends mortgage payments for 12 months or more for homeowners who are unemployed. If you qualify, your mortgage payments may be reduced to 31% of your income or fully suspended.
Principal Reduction Alternative (PRA)
The Principal Reduction Alternative encourages your mortgage lender to reduce the amount of principal you owe. Currently there are over 100 loan servicers participating in this program.
FHA Home Affordable Modification Program (FHA-HAMP)
The Home Affordable Modification Program, or HAMP, has helped many homeowners lower their payments and save their homes from foreclosure. The Federal Housing Administration has a HAMP program targeted specifically for the loans they insure.
The Home Affordable Foreclosure Alternatives (HAFA) Program
The Home Affordable Foreclosure Alternatives (HAFA) program is for borrowers who, although eligible for the government Home Affordable Modification Program (HAMP), are not able to secure a permanent loan modification or cannot avoid foreclosure. HAFA provides protection and money to eligible borrowers who decide to do a Short Sale or a Deed-in-Lieu of Foreclosure.
Second Lien Modification Program (2MP)
The Second Lien Modification Program helps homeowners with a second mortgage on their home. This applies to properties where the first mortgage was modified under the Home Affordable Modification Program (HAMP).
Additional Mortgage Relief Resources