Rhino Group, Inc.
GOVERNMENT PROGRAMS AVAILABLE TO HELP DISTRESSED HOMEOWNERS
The Government has devised a broad, comprehensive strategy to get the housing market back on track. The Making Home Affordable Program offers strong options for homeowners in distress that are unable to make their payments or must sell a home that is worth less than the amount owed on it.
There are three programs available:
HOME AFFORDABLE REFINANCE PROGRAM (HARP)
Eligible homeowners who are current on their mortgage but have been unable to take advantage of today's lower interest rates because their homes have decreased in value, may now have the opportunity to refinance. Through a refinance under HARP, participating Fannie Mae and Freddie Mac servicers will allow the refinancing of mortgage loans that they own or they guaranteed in mortgage backed securities.
Eligibility Requirements:
a. Owner occupant of a one to four unit home
b. The loan is guaranteed by Freddie Mac or Fannie Mae - We can tell you if your loan is owned by Freddie or Fannie
c. You are current on your payments
d. The amount you owe on your first mortgage does not exceed 125% of the current value
e. You have a reasonable ability to pay the new mortgage payments
f. The refinance imrpoves the long term affordibility or stability of your loan
Benefits:
a. Lower mortgage payments
b. Elimination of an adjustable rate or balloon payment
HOME AFFORDABLE MODIFICATION PROGRAM (HAMP)
Provides mortgage loan services with financial incentives to modify their existing first mortgage loans to help homeowners avoid foreclosure by modifying the payment to 31% of the homeowner's gross income. Servicers do this by lowering the interest rate to as low as 2%, extending the term, forbearing or forgiving a portion of the principle. The program involves a trial period and rates are fixed for a period of five years after which they may increase no more than one percentage point per year until it reaches the market rate at the time the modification agreement is prepared.
Eligibility Requirements:
a. Owner occupant of one to four unit home with an unpaid principle balance of up to $1,403,400
b. Have a first mortgage originated before 01/01/09
c. Have a monthly mortgage payment that is greater than 31% of your monthly gross income
d. Have a mortgage payment that is not affordable due to a financial hardship that can be documented
Benefits:
a. Participating servicers may not proceed with a foreclosure sale on an eligible loan until the homeowner has been evaluated for HAMP
b. Lowers the mortgage payment to 31% of the homeowner's gross monthly income
c. Incentive of up to $1,000 per year in loan reduction ($5,000 max)
d. No cost for the modification
HOME AFFORDABLE FORECLOSURE ALTERNATIVE (HAFA)
Provides incentives and guidelines for participating lenders to allow the homeowner to sell the home for less than is owed, this is known as a short sale. A short sale is typically a preferable option to foreclosure or deed in lieu of foreclosure as it allows the homeowner to stay in the home until it sells and typically does not damage the credit of the homeowner as much as a foreclosure would. Participating servicers must consider the homeowner for HAFA if the homeowner is not eligible for HARP or HAMP or requests a short sale. The guideline dictates that the servicer must render their decision on the short sale within 10 days which will dramatically shorten the time it has taken to get a decision in the past.
Eligibility Requirements:
a. Loan servicer must be a participant in the program - we can tell you if your Servicer participates or not
b. Homeowner must request a short sale or does not qualify for HAMP.
Benefits:
a. Typically less damaging to homeowner's credit than a foreclosure
b. Homeowner is not subject to a deficiency judgment - the servicer will not attempt to collect the unpaid balance
c. Homeowner can stay in property while short sale is in process
d, Servicer pays all closing costs including Realtor commission, back property taxes, HOA due/fees etc.
THE BOTTOM LINE:
If you are experiencing difficulty making your payments due to a hardship or owe more on your mortgage than the property is worth there are alternatives available to you. We have the knowledge and training to help you navigate the options and guide you through the process. I am certified as a Short Sale and Foreclosure Resource (SFR) by the National Association of Realtors (NAR) and hold a Certified Distressed Property Designation from Harris Real Estate University. Give me a call at 505-891-0900 or email me for information on options available for your specific situation, there is no fee for our services.
