A number of programs have been implemented under the Obama Administration to help those who own homes and are at risk of their homes going into foreclosure, or are struggling trying to meet monthly mortgage payments. Most of these programs come through the U.S Department of Treasury and HUD.
The Making Home Affordable (MHA) Program allows homeowners to lower their monthly mortgage payments by getting into a loan that is more stable and at today’s rates. For those who own homes that are no longer affordable, the program will help them find a way to get out from under the loan without going into foreclosure. In addition, options also exist for those who own homes and are unemployed, or those who owe more than their home is worth. The following programs are brief summaries of these available programs.
- Home Affordable Modification Program (HAMP): Hamp will lower your monthly payment to 31% of your monthly (pre-tax) income. Income must be verified. The usual HAMP modification gives the homeowner about a 40% drop in their monthly mortgage payment.
- Principle Reduction Alternative (PRA): This program was put in place to help homeowners that have homes worth much less than they owe. It encourages investors and servicers to reduce the amount owed on the home.
- Second Lien Modification Program (2MP): If you have your first loan modified under HAMP SM, and you have a second mortgage on the same property, it is possible that you may be eligible for a reduction or modification on the second loan.
- Home Affordable Refinance Program (HARP): If you haven’t been able to refinance your home because the value of the home declined, it may be possible to refinance through HARP
Many options are available to homeowners to assist them in keeping their home. This is a brief overview of just some of the programs available to assist homeowners. For a full review visit HUD.GOV