The housing crisis found many people struggling to keep and sell their homes and while the market has had marked improvement in the past year and a half; Americans are still experiencing mortgage problems. According to data collected last August, there were still 12.2 million people who owed more on their home than its appraised worth. One of the hardest mortgage problems is that rising unemployment have made it difficult for people to pay on their mortgages, many face foreclosure. Whether you owe more than your home’s value, lost your job, struggle to pay your mortgage or you are facing foreclosure; there are solutions to handling the hardest mortgage problems.
This is often referred to as being “underwater”. The home’s value has decreased and you owe more than it is now worth. The Home Affordable Refinancing Program, also known as HARP, can help you reduce your interest rate which in turn lowers your monthly mortgage payment. The program is only available to those who have mortgage guaranteed or owned by Fannie Mae of Freddie Mac, before May 31, 2009 and you must have kept current on your mortgage. There are other qualifying terms that an adviser can assist you with.
Some banks are sending out pre-qualification letters to their lenders but if you have not received one and you feel that you may qualify, please see your banker.
Problems with payments:
Another example of the hardest mortgage problems that Americans are facing, is difficulty in keeping current on payments. You may qualify for a mortgage grant. These monies are established through local, state or non-profit agencies and they are designed to help home owners keep up with their mortgage payments. Typically there are not governmental programs available for this type of assistance but the US Department of Housing and Urban Development can provide you with information on what assistance you may be eligible to receive.
Grants.gov will have information on any federal grants that may come available and most state housing authorities and finance agencies can supply with grant information.
There are varying qualifications for these programs so you will need to analyze where you may or may not qualify. Most grants are restricted to low income families however PHASES is a program that is not income limited.
6 payments or more behind:
The Streamlined Modification Initiative is a program available to homeowners that are 3 to 24 payments behind with a Fannie Mae or Freddie Mac loan. You must have had the mortgage for at least a year with a long-to-value ratio of 80% or more. This modification does not require a lot of processing, it is offered to those who are eligible and once the terms are completed the modification becomes permanent. The negative of this program is that it will not reduce your principle balance but it will reduce the monthly payment.
If you have fallen too far behind, the financial institution may threaten you with foreclosure. This means that they will take legal action to remove you from the home and the will even refuse to accept any payments that you may try to make towards the loan. This is by far the hardest mortgage problem to face. It will usually come in the form of a letter and it is important that you take immediate action. Many lenders fear that homeowners are facing permanent money issues that will prevent them from paying their mortgage on time every month for the life of the loan. It is possible that with proof, you can convince your lender that your financial woes are temporary or short term. When you call your lender, be sure to have bank statements and detailed information about your monthly expenses. Medical records can be helpful if it was a medical issue that prevented you from making mortgage payments. It is also ideal to have a plan of action. Tell the representative how long it will be before you can begin making timely payments or ask what programs you may qualify for. Be sure to write down the name of the bank advisor and anything that they say that could help you in your journey. Most lenders would rather find a way to resolve the issue with you because of the high costs associated with foreclosure proceedings.
If you have an FHA insured loan you would need to contact the HUD approved housing counseling agency. This organization can be a valuable resource in offering you solutions and services that you may be eligible to receive. HUD is a United States governmental agency and they can direct you to private or community organizations that deal with the hardest mortgage problems Americans face.
When you are facing foreclosure, seeking information can prevent you from losing your home or damaging your credit. Don’t despair; just pick up the phone and work hard to find a solution.