The FHA Hope For Homeowners program is still in effect and will continue to offer homeowners assistance with loan modifications through 2011. The FHA Hope For Homeowners was initiated by Congress in October 2008. President Obama’s administration has implemented the Home Affordable Program offering loan modification and refinance options for distressed homeowners. The Home Affordable plan applies to home loans which are held by Fannie Mae and Freddie Mac. The plan includes refinancing and loan modification options for homeowners who are not behind in payments. The Home Affordable Refinance option helps eligible non-delinquent homeowners take advantage of today’s lower fixed interest rates. The program is primarily directed towards homeowners facing imminent hardship. In addition, the Home Affordable Refinance program allows upside-down homeowners to refinance their home. How helpful this will be for homeowners in the Phoenix, Glendale and Peoria areas is questionable, as the loan to value ratio may not exceed 105%.
The Home Affordable Refinance program will end on December 31 of this year. Only loans which were orginated before January 1, 2009 qualify under the program’s guidelines. The Home Affordable Loan Modification option is being offered to deliquent and non-deliquent homeowners. Loan modifications include such options as extending the loan to a 40-year term and/or reducing the current interest rate to as low as 4.5%. In some cases, a balance reduction may be possible as well.
The goal of the modification program is to reduce the monthly payment so that it does not exceed 31% of your gross monthly income. The Home Affordable Loan Modification program will be available to homeowners through December 31. 2012. Loan modifications are avaiable on a one-time only basis. The Making Homes Affordable website offers an online tool to determine your eligibility for either program.
Foreclosures continued to rise in Phoenix and the Sun Valley in both January and February. If you find yourself facing an income reduction, suffering a job loss or seeing your home payment increase, please contact your lender to apply for a loan modification or home loan refinance. In closing, I would like to say that, if you do not qualify for either a loan refinace or modification, a short sale is an option that you should consider. Many lenders are finding that cooperating in a short sale is a win-win situation for everyone.
[...] The stimulus plan to forestall foreclosures with loan refinancing and modifications will not be very helpful for most distressed homeowners in the Phoenix area. But, to do nothing is worse. If you are facing the possibility of foreclosure or are in the foreclosure process, do not assume that they will not work for you. You can read more about available help here: Hope for Phoenix Area Homeowners. [...]