Housing is one the major issues concerning the U.S. government recently. For that reason, several preventive measures have been developed to keep the soaring number of foreclosures under permissible limit. Some of the more prominent ones are discussed in this article.
Home Affordable Modification Program (HAMP)
Under the leadership of U.S. President Barack Obama, a number of mortgage relief programs were floated in February 2009 so as to rescue the millions of underwater borrowers from an impending foreclosure. One such pro-consumer relief program is the HAMP. According to the mandate set by the Obama administration, HAMP is supposed to provide the following advantages to struggling mortgage borrowers:
- Lenders are liable to cut down on the interest rate charged by them on the mortgages taken out by the existing underwater borrowers. It should be noted that the modified payment amount can never be in excess of 38% of a borrower’s income.
- Lenders will have to further reduce the monthly payable amount to the tune of 31%. In this case, lenders will get the necessary assistance from the Treasury. However, for that, they’ll have to reduce the principal amount owed to them by the borrowers.
Home Affordable Foreclosure Alternatives (HAFA)
Borrowers who are unable to get a stable loan modification done but are eligible for the HAMP can take advantage of this mortgage relief program (i.e. HAFA). Moreover, people who are looking into the eyes of a foreclosure can also come under the HAFA program. It will provide financial assistance to those borrowers who are intending to opt for a short sale or Deed-in-Lieu (DIL) of Foreclosure as a last resort. Here are some of the advantages that HAFA provides to the underwater mortgage borrowers:
- Borrowers will be allowed to opt for a DIL or Short sale. In this regard, lenders cannot oppose such moves of the struggling borrowers prior to initiating any sort of foreclosure proceedings against their properties.
- Eligible borrowers are liable to receive $3,000 as monetary assistance from the federal government. This is a relocation compensation for the outgoing homeowner.
Safe Haven Program
This mortgage relief program is aimed at those borrowers who are not in a position to afford their existing homes, but have a considerable amount of income. The Safe Haven program is conducted by the HUD-approved housing counselors. In this program, housing counselors work out a debt repayment plan after reviewing the financial condition of the underwater borrowers. Here are some of the advantages of the Safe Haven Program:
- These non-profit housing counselors will negotiate with the borrower’s lender and plead with them to reduce the existing monthly mortgage payment amount. Moreover, they also assess an action plan of 90 days in duration on behalf of the borrowers.
- They’ll also create a budget for the borrowers based on the financial information provided by them. Under this program, housing counselors evaluate the performance of the borrowers for a period of 90 days.
Apart from that, housing counselors will refer a borrower’s case to his/her lender.
When you’re ready to speak to a lender about getting pre-qualified for your new home, contact one of my professional mortgage brokers. And if you have any questions about selling or buying a home in metro Albuquerque, be sure to contact me today!
This article was contributed by Selena Cowell. She is a professional writer for Mortgagefit Community. She has written many of her articles on mortgages, refinancing, loan modification, real estate trends, real estate markets, and more!
biz page or profile.