What Will the Government Bailout Plan Do for Me If My Home Is in Foreclosure?
Federal agencies work together to bailout homes facing foreclosures. These programs help homeowners lower their mortgage payment, temporarily suspend payments, or reduce the amount owed on their loan. You can call a HUD-approved housing counselor to determine if you are eligible for a foreclosure prevention program. Counselors are available 24 hours a day in over 170 languages. You can even connect with a housing counselor on the Homeownership Preservation Foundation website's chat system. The counselor can talk to your mortgage servicer to help you obtain an alternative payment plan.
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Loan Modification
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The Home Affordable Modification Program, or HAMP, helps homeowners obtain an affordable mortgage payment. The homeowner must work with his mortgage servicer to get a HAMP loan modification. The modified mortgage payment will not exceed 31 percent of the homeowner's total household income. Qualified homeowners will go through a trial modification period. If the mortgage payments are paid on time, the modification will become permanent. The home facing foreclosure must be the homeowner's primary residence. Homeowners with Freddie Mac, Fannie Mae and Federal Housing Administration, or FHA insured loans qualify for HAMP.
Forbearance Plan
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The Home Affordable Unemployment Program, or UP, helps homeowners who have experienced a decrease in income obtain a temporary reduction or suspension on their mortgage payment. The homeowner must be receiving unemployment benefits during the forbearance period to qualify for help. The unpaid principal balance of the loan cannot exceed $729,750 for a single-family home. The mortgage does not have to be in default, however, default is foreseeable in the near future. The forbearance period lasts for a minimum of three months.
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Emergency Homeowner's Loan Program
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The Emergency Homeowner's Loan Program, or EHLP, helps unemployed homeowners to pay their mortgage. A declining balance loan for up to $50,000 can be obtained to pay for the mortgage, payments in arrears, taxes and insurance. The money can receive over 24 months or until the maximum amount has been awarded. The homeowner's income prior to the decrease could not have exceeded 120 of the area's median income. She must have experienced a 15 percent decrease in income to be eligible for an emergency loan.
Hardest Hit Fund
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Money from the Hardest Hit Fund was provided to states that were impacted with the most foreclosures. Homeowners can get help with paying for their mortgage or getting the unpaid principal balance reduced. The homeowner must be low-to-moderate income to qualify for help. Homeowners who have decided to sell their home to avoid getting a foreclosure on their credit history, can get transition assistance to secure new housing. The money can be used to pay for the security deposit, utility fees and other moving expenses.
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References
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