Getting Government Help to Stop Foreclosure

There is government help to stop foreclosure for homeowners facing foreclosure. Lenders and borrowers must both voluntarily participate in the government programs. Recently, the government has put a great deal of pressure on lenders/loan services to cooperate with borrowers to find ways to prevent foreclosure, and keep borrowers in their homes. The programs were introduced by the Obama administration as part of the government’s strategy to help stop the record number of foreclosures and to stabilize the real estate housing market. Government help to stop foreclosure has slowed down many foreclosure filings and has prevented lenders from instituting more foreclosure filings. The following is a list of government programs available to borrowers and their lenders:

• The Home Affordable Refinance Program (HARP)
• The Home Affordable Modification Program (HAMP)
• The Home Affordable Unemployment Program (UP)
• The Home Affordable Foreclosure Alternatives Program (HAFA)
• FHA Home Affordable Modification Program (FHA-HAMP). VA loans are modified under various other programs.  Check with your lender or attorney.

HARP

HARP has been extended through June 2011 to give qualified homeowners with little or no equity an opportunity to refinance their homes. The program is available if you have a Fannie Mae or Freddie Mac loan.  To find out if your loan qualifies, contact your lender.  

HARP eligibility:

• The property must be your primary residence/owner occupied (1-4 units)
• You must be current on your mortgage payments
• Loan to value ratio cannot exceed 125%

HAMP/UP

The HAMP program is available to qualified borrowers who want to keep their homes by getting a mortgage modification. Unemployed borrowers may also qualify for the HAMP/UP program.

HAMP and UP eligibility:

• Loan must have originated on or before January 1, 2009
• Property must be owner occupied/primary residence (1-4 units)
• Current mortgage payment must exceed 31% or more of your gross income
• Financial hardship must be documented
• The unpaid principal balance on your loan must be equal or less than $729,750 on a single-family residence (higher limits apply for 2-4 units)  
• If you are unemployed, in a HAMP program and current on your payments, you may be eligible for the UP program to get a forbearance. You have to document that you have been unemployed for three months. You may also be eligible for suspension of your payments for a few months as well.   

HAFA

HAFA is for borrowers who have been turned down for a mortgage modification under HAMP, and want to participate in a short sale or deed in lieu of foreclosure program. The government will give your lender an incentive of $1,500 to participate and close the transaction.  You will also receive a government incentive of $3,000 for your relocation costs.

HAFA Eligibility:

• Lender must have turned you down for a modification under the HAMP program
• You are delinquent in making your payments under the HAMP program
• You must request that you want a short sale or a deed in lieu
• The lender must agree to release you from any further debt after the transaction closes. This way the lender cannot get a deficiency judgment against you for the difference between the sale proceeds and your loan balance.   

FHA-HAMP

Borrowers who have an FHA loan may qualify for FHA-HAMP.  Eligiblity requirements are similar to HAMP. 

Seek an Attorney’s Advice

A foreclosure defense attorney can explain the various government programs to you and help you decide which one is best for you. The attorney can advise you of other options that are available to you to help you save your home from foreclosure.  It is not recommended that you try and fight a foreclosure proceeding without a foreclosure defense attorney’s help because the foreclosure laws are complex.