No mortgage Deferral Program is available presently

As of today there are in fact no government programs directed at mortgage deferral. The American Recovery and Reinvestment Act of 2009 does provide relief for homeowners, but deferral is not among the options presently contained in the language of the bill. The government’s website, www.makinghomeaffordable.gov, details the current options for struggling homeowners.

The two available options for homeowners are refinancing their current mortgage, or modifying their current mortgage. The Home Affordable Refinance Program is for homeowners who have loan guarantees through Fannie Mae or Freddie Mac. The plan allows these homeowners to easily refinance their loans in order to make their monthly payments more affordable. The process is more of a hassle than the modification program because not only must you already be in a loan with Fannie Mae or Freddie Mac, but your credit has to be in good shape, this is the best option for those who foresee trouble on the horizon, but are still in current payment status. To be current you must not be more than 30 days late in the last 12 months.

The Home Affordable Modification Program modifies mortgages to enable homeowners to avoid foreclosure. Some aspects of loan modification contain deferral-like processes. Since you are not obtaining a new loan, your credit is not as much of a factor. To qualify, the home loan in question must be your primary residence, you must owe less than $729,750, you must have verifiable trouble meeting your mortgage requirements, your monthly payments must exceed 31% of your gross monthly income, and your lender must be a participant in the Home Affordable Modification Program.
Finding out if you qualify for either program is easy. Go to www.makinghomeaffordable.gov, you will be given the two options, either modification or refinance, take a quick questionnaire, and if you meet the initial criteria for either program, you will be given further instructions with contact numbers.

Having said that there is no “deferral” program available through recent recovery packages, some lenders do offer loan forbearance in some cases, forbearance is similar to modification, which is similar to a “deferral.” Forbearance involves moving existing debt or payments to the end of the loan, with added interest, whereas an actual deferral simply swaps your current payment for a future payment at the end of your contract, however, the government is not currently offering any assistance to qualify homeowners for forbearance contracts, only modification. Modification may include forbearance, if you meet the criteria at www.makinghomeaffordable.gov.

Government Mortgage Help for Retirees

Do you wonder what kind of government mortgage help there is for you, as a retiree? Some information to help the elderly stay in their homes can be found at the Department of Housing and Urban Development (HUD) official website, under the category, Information for Senior Citizens. There is information on reverse mortgages for senior citizens.

If you a retiree and are having a difficult time financially, either because of your mortgage, or for some other reason, a reverse mortgage might help you. Those 62 and older can receive a cash payment for the equity they have in their homes.

Maybe you are having other bills, such as medical bills, long-term care insurance, or some other major expense, that is making it hard for you to make the mortgage payment, the cash from a reverse mortgage could help you pay off those debts. It might then be easier to make your mortgage payments, or repay your reverse mortgage loan. Because you don’t have to repay the loan as long as you live in the house, a reverse mortgage could help you avoid foreclosure.
You can receive the money as a lump sum payment, monthly payments, or a combination of both. There are some reverse mortgages, such as HUD’s Home Equity Conversion Mortgage that will provide a line of credit you can you use whenever you need cash.
The advantage of a reverse mortgage is you would not have to repay the loan as long as you live in the house as your principal residence. If you have not paid it back when you die, however, your heirs, if any, will have to pay back the loan out of their inheritance, or their own pockets.

You can qualify for a reverse mortgage without a credit check. There are no income requirements. Although the program is often used for other purposes, such as making home improvements, buying cars, or vacations, it can provide mortgage help for those who need it.
HUD has a list of approved reverse mortgage counselors. You can search by state.

Another program that can provide mortgage help for retirees is not specifically for the elderly or retirees, but many such people can qualify for the program. President Obama’s mortgage program can help those who cannot make their monthly loan payments to receive a loan modification.

Your monthly payments might be reduced if your interest rate has increased, or you are receiving less money. You might qualify if your home is your primary residence, your mortgage is equal to or less than $729,750, you are having trouble paying your mortgage, and you received your mortgage before January 1, 2009.

Your payments would be reduced by reducing your interest rate to 2%, extending the loan term up to 40 years, and if you would defer a portion of the principal until the loan is paid, and waive interest on the deferred amount.

One other program, not specifically for retirees, but which could provide help for those facing foreclosure, including the elderly, is Fannie Mae’s Deed for Lease program. Those who face foreclosure may be able to stay in their homes by temporarily signing their lease back to the lender and renting the home at fair market value. More information can be found on the official Fannie Mae website.

Is Obama’s Mortgage Assistance Reaching You

President Obama’s mortgage relief program is now reaching 20% of those eligible for the program, or 650,000 borrowers, according to a new government report. More than 650,000 people have signed up for trials that will last at least five months, according to the Treasury Department for the program that had a slow beginning. As of last month, 16% of eligible homeowners had been reached with the program. Homeowners must be at least 60 days behind with their payments to be eligible.

Under modifications with the program, monthly payments will be reduced to an affordable amount–no more than 31% of a borrower’s pre-tax income. The president’s mortgage relief program began in March, but not many people applied at first. As of now, however, 920,000 loan modification offers have been given to about 3 million eligible homeowners. That is a total of 29 %. As of the end of July, offers had been made to only about 15% of eligible homeowners.
About 130,000 eligible California homeowners are enrolled in the “Making Home Affordable” loan modification program. President Obama introduced the program in February. Of the homeowners who were in foreclosure or two payments behind in the state, about 19% have enrolled.

Other states that have been hard hit by real estate problems have a similar amount of residents involved in the program. Arizona has 22% of eligible residents enrolled, Nevada, 18%. The number of people involved in Florida, 12% is much lower. Some believe that may be because a high number of investor owned homes did not qualify. The program is a $50 billion program.

Many housing advocated are still disappointed with the number of people who have signed up for the trials under the program. Government officials are pressing industry officials to improve performance. Many people have claimed that financial institutions lose their paperwork, transfer them repeatedly between departments, and ask them to fill out applications over and over.
Many economists are skeptical that President Obama will achieve his goal of reaching three to four million borrowers with the program within three years.

Those interested in President Obama’s mortgage relief program must complete a huge stack of paperwork to apply. They must also show they can make their payments on time. According to RealtyTrac, an online marketer of foreclosed homes, 937,840 homeowners filed for foreclosure in the third quarter of this year. Some housing counselors say the number of people being assisted by President Obama’s program is not nearly as high as the number of people being foreclosed upon.

John Taylor, head of the National Community Reinvestment Coalition says the president’s plan is “lagging behind” the number of foreclosures. Administration officials, however, say the program is on track.

Fannie Mae Lease Home Program

 

Homeowners in danger of losing their homes through foreclosure may be able to keep them by leasing them temporarily under Fannie Mae’s new program, Deed for Lease, and becoming tenants in their houses.
Under the program, owners who qualify would temporarily sign a lease. The property would temporarily revert back to the lender, and the person in danger of foreclosure could still live in the house as a tenant. According to Fannie Mae, thousands of people who might otherwise lose their homes could be helped and could live in their homes at least another 12 months.

 

According to Jay Ray, Vice President of Fannie Mae, the program will help those who could not be helped by Fannie Mae’s other programs, those who "are facing foreclosure." He said he believes the new program will help "some of the uncertainty of foreclosure." He also said it will help stabilize neighborhoods because families will be able to stay in their homes "during a transitional period."
Fannie Mae is not specifically a lender and does not lend money to individuals. Instead, it works with brokers, bankers, and other mortgage partners to make certain they have adequate funds to lend to consumers.

In September of 2009 about 4.45 percent of Fannie Mae’s borrowers were seriously delinquent. According to Fannie Mae, statistics are not yet available as to how much the Deed for Lease program will cost or how many homeowners will be eligible to participate.
Although homebuyers would have to give up the deed to their houses, they would be able to rent their houses at market rate for at least year. According to Fannie Mae, some leases might be renewable after that on a month-to-month basis.

Those eligible for the Deed for Lease program include those who live in their homes as their primary residence. They also must be released from any subordinate liens on the property. In addition to those owning or purchasing the homes, their tenants may also be eligible for leases. Those interested in the program must show that the new market rental rate is no more than 31 % of their total income.
Fannie Mae answers questions about the Deed for Lease program on its website. The topics include subleasing (which is not allowed), whether someone who is at first interested in the new program may change their minds (it depends on the circumstances), and what one can do about pets.

According to Fannie Mae, certain pets pose a "liability threat" to both landlord and tenant. Those who own pets must, for that reason, have renter’s insurance. The insurance must include liability insurance for pets. Fannie Mae must be named as an additional insured in the policy.