There is a pit stop before the exit.

There is a pit stop before the exit.

Dealing with a foreclosure is one of the hardest stresses on a homeowner. In fact, the possibility of foreclosing persuades many people to avoid purchasing homes altogether – making them stuck in the costly rental process. Knowing your options prior to finalizing any foreclosure deals will help you keep your head “above water” until you can get back on your feet.

Refinancing – Getting lower mortgage payments is a viable option for a homeowner. Under the Obama Administration, there are now four programs that help any homeowner from getting into a foreclosure prematurely.

Home Affordable Modification Program (HAMP)

This program is great for any homeowner who is employed but struggling to make ends meet. Releasing June 2012, HAMP will allow you the accessibility to cut your mortgage payments down to 31-percent of your monthly income. It should be noted though that the income will be measured pre-tax and must be verified by the company prior to distributing the claim. Once verified, you can save several hundred dollars each year with this plan – helping you avoid a messy foreclosure.

Home Affordable Refinance Program (HARP)

If you are not yet behind on your payments but want to refinance to a more affordable loan-term, HARP may be a viable option for you. Refinancing can be difficult, especially if your home value consistently gets declined. To be eligible for this program your mortgage must be:

  • Freddie Mac or Fannie Mae owned or guaranteed
  • Freddie Mac or Fannie Mae sold prior to May 31, 2009
  • Newly refinanced by HARP, unless it was Fannie Mae refinanced from March 2009 to May 2009.
  • Guaranteed an 80% or greater loan-to-value (LTV) ratio.
  • Current with a steady payment history of at least 12 months.

If your home meets all the criteria, you might be the perfect candidate for the HARP program. Your mortgage provider will be able to assist you with the process. The sooner you get started, the less stress you have to worry about with foreclosing.

Second Lien Modification Program (2MP)

If you have two morgages, with one already under the HAMP program, you can utilize this program to get the same modifications on your second mortgage. This program is simple and easy to utilize since the eligibility is quite short:

  • Have one mortgage under HAMP
  • A clear 10-year felony history with fraudulence or felony larceny in connection with real estate or mortgage transactions.
  • Made at least three consecutive payments on the first mortgage HAMP.

Contact your local offices to see if you meet eligibility requirements to help you get out of debt sooner – and step farther away from foreclosure.

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This is filed under Foreclosures.

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