How to Apply for Government Foreclosure Assistance
The federal government offers the Making Home Affordable program to prevent foreclosures. This initiative subsidizes private home refinancing loans and loan modification programs. Homeowners apply for this assistance when acquiring a private loan, but the federal government does offer assistance both online and over a telephone hot line to assist homeowners in determining eligibility for the program. The department of Housing and Urban Development (HUD) also provides foreclosure avoidance counseling in all 50 states.
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Instructions
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Determine your eligibility for the Making Home Affordable program before applying for home refinancing loans or requesting a loan modification. Use the eligibility tool located on the program website, as listed in the "Resources" section below. You may also call 888-995-4673 for direct assistance. The program does not provide assistance to homeowners who are currently late on mortgage payments or are in the foreclosure process already. The value of the mortgage can't exceed 125 percent of the current market value of the home.
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Request foreclosure avoidance counseling through HUD. You may find links to contact information for your state in the "Resources" section below. Speak with a counselor in your area who may be able to provide you with relevant legal details about the foreclosure process in your state. The laws governing foreclosure differ significantly from state to state. The government subsidizes the counseling service offered through HUD, so it will not cost you anything to discuss your mortgage issues with a trained counselor.
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Request loan modification from your current lender. Write a detailed letter explaining your financial situation, outlining your budget and requesting a reduction in monthly mortgage payments. If you are eligible for the Making Home Affordable program, mention that in your letter. The program provides payments to private lenders that agree to modify home mortgages.
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Apply for a refinancing loan to reduce your monthly mortgage payments. Compare rates offered by local banks and credit unions with nationally advertised rates by using a free rate listing service like Bankrate.com or MortgageLoan.com. Send in multiple applications to lenders to ensure that you lock in the lowest rates. If you are eligible for the Making Home Affordable program, mention that fact during the application process to improve your chances of winning approval and to potentially lower the rates offered to you.
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