Programs to Help Avoid Foreclosure
If you are facing foreclosure or know you may be unable to make your mortgage payments going forward, read on. As of the last quarter of 2008 there are several potentially helpful programs that have either been launched or are in the launching phase, most of them favoring loan modification as an option to foreclosure.
These include the Hope for Homeowners bill (H4H), lender-created programs (including Countrywide Financial, Citigroup, Bank of America, JP Morgan Chase and IndyMac Federal Bank, FDIC) and a new Federal Government Loan Modification program born in November 2008 (with participants including Fannie Mae, Freddie Mac, Federal Housing Home Loan Banks, Wells Fargo, Hope Now, Department of the Treasury, Federal Housing Administration and the Federal Housing Finance Agency).
Keep in mind that none of these programs guarantee automatic assistance and that loan modifications are handled on a case-by-case basis. You need to understand the qualifications under each program and be prepared before you pick up the phone to call your lender. When you have all the information—such as your loan number, bank statements, your most current mortgage statement, income information and documentation and a letter demonstrating financial hardship, then you are ready to call your lender and get to work.
Again, as this information changes on a continuous basis, please do not forget to check our New Updates site for the most current information and links to all new programs. That site is free for all book purchasers at our website: www.MortgageWalkawayOptions.com. The following information on current lender programs offering assistance is new. There is also information in our book on other programs that can help you, such as the Hope for Homeowners bill and others.
Lender programs are a hot topic right now. Countrywide Financial/Bank of America was the first lender to most recently announce its plans to help borrowers. As part of the initiative, Bank of America agreed to cut monthly housing payments, including mortgage, property taxes and insurance, to no more than 34% of gross income. This plan is expected to help keep as many as 400,000 troubled borrowers in their homes. It targets holders of subprime adjustable rate mortgage (ARMs), subprime fixed rate loans and option ARMs. Prime and Alt-A borrowers, who did not document their income, will be eligible for the program as well.
Following on the heels of this announcement came JP Morgan Chase and Citigroup with announcements that they too were going to help mortgage holders stay in their homes and avoid foreclosure.
Chase temporarily suspended foreclosures for 90 days, with plans to introduce new financing alternatives and open new counseling centers staffed with more loan counselors to get borrowers qualified for loan modifications. The lender expects to help over 400,000 borrowers in the next two years.
Citigroup followed with an announcement that it too will suspend foreclosures and has plans to help over 500,000 distressed homeowners stay in their homes by reworking delinquent home loans. Please visit the website of your lender to get further information on mortgage assistance programs.
The FDIC, the federal agency that insures most bank deposits made in the U.S., announced a plan to prevent approximately 1.5 million homes from foreclosing by offering financial incentives to mortgage servicers who modify loans. They plan to pay the providers a fee to cover expenses for each loan modification and also to share up to 50% of any losses incurred should a newly modified loan default in the future. To be eligible borrowers would have to be at least two months behind in payments on loans for homes that they live in (no second/vacation homes or rental properties would qualify). The service providers of the loans would be able to lower the borrowers’ monthly payments to about 31% of the borrowers’ monthly income. The program is set to begin December 15, 2008.You can visit their website for plan specifics at http://fdic.gov/consumers/loans/loanmod/index.html.
Keep yourself educated so you know all the most current options and information‚it may very well help you keep your home. Visit our website to order our book for full analysis of all available options at www.MortgageWalkawayOptions.com.
