Mortgage Help
How Does The Government Offer Mortgage Help In Times Of Crisis?
Author: Peter Gomes
President Obama’s ‘Making Home Affordable’ initiative is aimed at improving the real estate industry by providing mortgage help to 7-9 million borrowers. Under this initiative, the U.S. Government provides options for home owners to refinance their home loans with the help of Home Affordable Refinance Program and also modify them with the help of Home Affordable Modification Program.
What is Home Affordable Refinance Program (HARP)?
If you have a conforming home loan, you can obtain mortgage help and refinance into a more stable fixed rate loan under the HARP. The interest on the refinance loan will be based on market rates and you may have to pay the closing costs. This program will expire on 30th June, 2011.
Who can qualify for HARP?
You can refinance under this program if you meet the following qualifying criteria:
- You own and live in one- to four-unit home.
- The home loan is owned or guaranteed by Fannie Mae or Freddie Mac.
- You are current on your home loan payments.
- You have the capacity of paying the new loan payments.
You can also qualify for mortgage help under the program even if you have a second home loan provided the amount you owe on your first home loan does not exceed 125 % of the current market value of your property.
What is Home Affordable Modification Program (HAMP)?
The HAMP provides mortgage help to borrowers who are finding it difficult to make their monthly mortgage payments on time. So, if you are late on your home loan payments or may default soon, you can lower your payments with the help of HAMP. All the financial institutions that are sponsored by the Government must participate in this program and for other lenders, participation is voluntary. The program provides incentives to lenders to restructure your home loan and make it more affordable. HAMP will expire on December 31, 2012.
You can qualify for Home Affordable Modification Program if your mortgage has originated before Jan. 1, 2009 and your monthly home loan payment (including taxes and home owners insurance) exceeds 31 % of your gross monthly income. You do not have to bear any cost for modification of your home loan. For seeking any sort of mortgage help from the U.S. Government, you can visit financialstability.gov, their official web site. You can also seek information on the programs (free of cost) from your lender or a HUD-approved housing counselor.
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