There are many federal programs in place to help home owners faced with foreclosure, an issue that has been at the forefront of the housing crisis in this decade.
Information about these resources can be found all in one place on the government's Homeowner Help page.
First, download the Mortgage Assistance Guide from the federal Department of Housing and Urban Development.
If you are confused about what to do and you can't get help from your mortgage servicer (the company that you make the payments to), you can talk to a housing counselor by visiting www.hopenow.com or calling 888-995-HOPE (4673).
These counselors, who are part of a HUD-approved program, have the training and background necessary to help you understand your choices and what steps you can take to keep your home.
Please note borrowers should never have to pay anyone to help them file their claim. Eligible families can receive free assistance by contacting a HUD-approved housing counselor.
Are you worried about how you will make your next mortgage payment? The government's Home Affordable Modification Program, also known as HAMP, is designed to help home owners who are in default or in danger of defaulting on their mortgages.
Fannie Mae and Freddie Mac
Your mortgage may have been purchased by Fannie Mae or Freddie Mac, two agencies that often buy mortgages from the banks that have contracted with home buyers. The Home Affordable Refinance Program, or HARP, is intended for borrowers with these loans – as long as your mortgage is more than 80% of what your home is worth and you are current on your payments. Fannie Mae has produced an interactive video to help you understand how to avoid foreclosure as well as the consequences of the choices you make.
First, find out if your loan is owned by Fannie Mae or Freddie Mac.
If Fannie or Freddie own your loan, it is unlikely that you will be eligible for a principal reduction – meaning that these agencies can't reduce the amount of money you owe on your home. However, you may be able to get a lower interest rate or have the terms of your mortgage extended by working with your servicer.
FHA. If you have an FHA loan, you may be eligible for the Streamline Refinance program if your original home loan is in good standing and the refinance will lower your monthly interest payments.
Multistate/Federal Mortgage Servicer Settlement
The attorneys general from 49 states and the District of Columbia recently reached a settlement with five mortgage servicers that requires them to help borrowers in distress. Find out if you can be helped under the terms of the agreement.
In addition to the direct financial assistance to home owners, each state received a lump-sum payment, and many have flexibility in deciding how to use the money to help home owners. Find out how much your state received. Please contact your state Attorney General office to encourage your state to use this money to improve housing in your community.
Even if you have already been through the foreclosure process, you may still be eligible for assistance.
Funds from the Mortgage Servicer Settlement were set aside for borrowers who were incorrectly foreclosed on between Jan. 1, 2008 and Dec. 31, 2011. If you believe you are eligible for relief under this settlement, please contact your state attorney general's or the National Settlement Monitor's office (1-866-430-8358) for more information.
Additionally, federal regulators took action against 14 mortgage servicers and established the Independent Foreclosure Review to determine if borrowers were harmed due to the companies’ deficiencies for foreclosures between Jan.1, 2009 and Dec. 31, 2010. The companies may have to compensate borrowers depending on the findings of this review. But act quickly: Borrowers must submit requests for review no later than Dec. 31, 2012.
The terms of the settlement include incentives for the five servicers to donate lender-owned, or REO property, to nonprofits, government agencies, or disabled service members or their relatives. Servicers are making applications available to nonprofits and veterans’ organizations and outlining the process to apply. If you are interested, please contact the banks directly:
Ally/GMAC: Dana Dillard, 214-874-2269
Bank of America: PropertyDonation@BankofAmerica.com
Citibank: Lisa English, 972-653-4588 and/or Bryan Bolton 636-261-4448
JP Morgan Chase : 866-803-9844, firstname.lastname@example.org
Wells Fargo : REOdonationprogram@wellsfargo.com