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  •              Troubled Asset Relief Program: Help for Struggling Homeowners

    In March of 2010, President Obama released a series of programs known as the Troubled Asset Relief Program aimed at helping financially struggling homeowners.  In response to the nearly 25% of American homeowners who found themselves underwater, or what is termed as being “upside down” in their mortgages, the President’s plan lowers payments through refinancing and loan modification programs with new government-backed mortgages. The government is offering initiatives for loan providers and banks to write off some principal amounts due on loans for homeowners through these modification programs, rather than just lowering interest rates.  These plans are expected to help three to four million struggling property owners over the next few years.

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    The government emphasized that no taxpayer money will be spent on these programs, and that the monies needed for the plan would be instead taken from $50 billion set aside for the Troubled Asset Relief Program.

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    In Alabama, during financially difficult times , it has come as a help to balance the budget that there has been a national settlement of $25 billion with five big mortgage companies .The settlement may even be instrumental in helping low income families to become home owners.

    $25·3million from the settlement is to go to the office of Alabama Attorney General Luther Strange. This money does not come in a lump sum but is slowly being received in the office and $19·3 million from the total is to be used during the years 2013 through 2015 to fund the attorney general`s office and the district attorneys `offices throughout the state. According to Arthur Orr, R-Decatur (Senate budget committee Chairman) this will mean that money that would have had to be used by these offices from the state General Fund budget can now be released to support other programs. The amount of the settlement when compared with the $1·68 billion of the state`s General Fund budget for the fiscal year starting Oct.1, may seem small he said,” but that helped the overall budget picture”.

    State officials are being approached by two advocacy groups for the poor of Alabama, they are The Arise Citizens` Policy Project and the Low Income Housing Coalition of Alabama, who want the remaining $6 million to be used to give housing to those in need. Jim Cames who is the spokesman for Arise Citizens said that when the Legislature voted last month to set up the Housing Trust Fund it opened up the way to providing affordable housing for low income residents but was unable at that time to put any money into it due to the state`s budget problems. Now that there is mortgage settlement money available it could be that the project can be started off.

    Joy Patterson, the attorney general`s spokeswoman, says that the attorney general would be happy to look into the suggestion although no decision has been made yet as to how the money will be used.

    The $25 billion agreement in February was reached by the federal government along with 49 state attorneys general including Alabama`s attorney general Strange. The five large mortgage companies were accused of improper handling of mortgages including employees signing foreclosure paperwork without reading it. They were Ally (formerly GMAC), Bank of America Corp., Citi, J .P .Morgan Chase & Co., as well as Wells Fargo & Co.

    The total estimated share for Alabama is $106 million and in addition to the amount to be provided to the attorney general`s office Alabama`s borrowers are expected to receive nearly $30 million for loan term changes and other help. Those borrowers who lost their homes due to foreclosures between 2008 and 2011 and who suffered servicing abuse are expecting $20million in payments while those borrowers who`s mortgages are under water are to have refinanced loans said to be worth almost $30 million.

    The amount to be received by the attorney general`s office may be used to help the people who have been hurt most by the nation`s housing crisis.

    The Housing and Urban Development Department has created a new mortgage assistance program, the Emergency Homeowner’s Loan Program, designed to help unemployed workers who are struggling to pay their mortgages. This long-awaited program could be just what thousands of families needed to avoid foreclosing on their home loans. Although this program is administered on the local level, all participating states are following the same guidelines so they can be described jointly in this article. Five other states, Connecticut, Delaware, Idaho, Maryland, and Pennsylvania have their own unemployed workers assistance programs with similar services and features offered to homeowners. This article will look at what the program offers unemployed workers and how you can benefit from this assistance program.

    Participating States

    The participating states in this program are Alaska, Arkansas, Colorado, Hawaii, Iowa, Kansas, Louisiana, Maine, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Mexico, New York, North Dakota, Oklahoma, South Dakota, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming and Puerto Rico. The program was created as a partnership between the United States government, and community partners throughout the country. One of the largest of these supporting partnerships is NeighborWorks America.

    This program was launched with funding from the Dodd-Frank Act, which set aside $1 billion dollars to implement the program. The program provides interest free loans to unemployed workers who are struggling with their mortgage payments. The maximum loan under the Emergency Homeowner’s Loan Program is $50,000. The loan can be used to pay for mortgage payments over a period of no more than 2 years. After a long waiting period since rumors of the program were first leaked by the Department of Housing and Urban Development, the program is set to launch as soon as the Senate signs the bill after the House of Representatives signed it in March of this year.

    Estimates and forecasts from the Department of Housing and Urban Development set the number of unemployed workers set to benefit from this program at 30,000 and the average loan they will receive at $35,000. As with most programs launched by the Department of Housing and Urban Development, HUD, they will be managed by other agencies with funds granted by HUD. In this case, the managing organizations will be non-profit community agencies, such as NeighborWorks America who are well placed in the community throughout the participating states to provide the help needed. The next article in this series will provide more information on the particulars of this program and how many funds were assigned to each state.

    Have you heard about the new federal mortgage help program? We are talking about the Emergency Homeowners’ Loan Program (EHLP) managed by HUD. Although this program is still in the development stages, it could prove to be such a huge help for borrowers we feel you should know what information HUD has provided up to now about this exciting new program.

    Goal

    The goal of the Emergency Homeowners’ Loan Program is to to help homeowners who are struggling to pay their mortgages due to a drop in their income of at least 15 percent because of unemployment or underemployment due to no fault of their own. This means that unemployed workers who were laid off due to lack of work or whose hours were reduced may receive help with their mortgage payments.

    How Will The Program Work?

    The main tool the EHLP will use to assist homeowners is to grant eligible homeowners with a bridge loan of up to $50,000 to pay for up to 24 months of monthly payments, as well as delinquent mortgage, tax and insurance payments.

    Under this program, borrowers must use 31 percent of their income to pay for their mortgage and the EHLP will pay the balance. However, the minimum payment for any homeowner is $25. The program will cover for arrearages and monthly payments for up to 24 months or until the loan reaches $50,000, whatever happens first.

    Repayment

    The beauty of this program is you do not have to repay the 5-year term loan, just as long as you regularly pay your monthly mortgage payments. Every year the balance of the loan drops by 20 percent, so by the end of the five years the balance will be extinguished if the borrower has followed the mortgage payments schedule.

    Which States Will Qualify?

    The EHLP program will be exclusive for states with a high unemployment who are not benefiting from funds by the Treasury’s Innovation Fund for Hardest Hit Housing Markets. This includes the following 32 states:

    Alaska

    Arkansas

    Colorado

    Connecticut

    Delaware

    Hawaii

    Idaho

    Iowa

    Kansas

    Louisiana

    Maine

    Maryland

    Massachusetts

    Minnesota

    Missouri

    Montana

    Nebraska

    New Hampshire

    Mexico

    New York

    North Dakota

    Oklahoma

    Pennsylvania

    Puerto Rico

    South Dakota

    Texas

    Utah

    Vermont

    Virginia

    Washington

    West Virginia

    Wisconsin

    Wyoming

     

    Eligibility

    The next article will look into the eligibility criteria of the EHLP program as specified by HUD. Notice that this program is still in development and the program’s terms could change at any moment.

    The New Mexico Mortgage Finance Authority is the main agency responsible of improving access to housing for low to moderate income households in New Mexico. Although not run directly by any government agency, it is an agency of its own which uses both taxes and alternative sources for its everyday management, it is responsible as the state’s official housing agency for over 35 programs, which provide help and assistance to homeowners, the homeless and families that need help finding their first mortgage.

    The New Mexico Mortgage Finance Agency was first created in 1975 by the state legislature as a tool to distribute affordable mortgages to low and moderate income families. The funds for these mortgages, or more accurately the insurance for these mortgages, was generated by the sale of tax-exempt bonds. However, since 1997, the New Mexico Mortgage Authority also became the state’s housing agency, which brought under the same roof all housing departments in New Mexico. Now the MFA is responsible for all housing programs including section 8 and other federal projects. The Agency continues to be managed without any funds from the state, although it does manage programs which rely on federal taxes for funding.

    The growth of the MFA from its humble beginnings in 1976 is noteworthy. When it started in 1976, the MFA had two employees, in 2008 it had 66. It started selling $20 million in bonds a year, now it sells over $214 million.

    The services offered by the New Mexico Mortgage Finance Authority include:

    First-Time Home Buyers Loans.

    The Agency offered $221 million to over 1,700 first-time buyers in New Mexico in 2008. These loans allow low to moderate income households to qualify for loans to finance their first home.

    Down Payment Assistance

    The Agency also helps households find the funds to pay for down payments and other mortgage expenses. In 2008, the MFA distributed $4.6 million in down payment assistance and grants. The difference between a grant and assistance is grants do not have to be paid back as long as certain requirements are met by the borrower.

    Construction of Homes

    The MFA does not only provide funds for mortgages, it also gets involves in the construction of rental and homeownership homes. In 2008, the organization invested $53 million in the construction and maintenance of over 1,400 homes.

    Rent Programs

    Households who cannot at this time afford to buy a home can also receive help to pay for rental expenses. In 2008, the MFA granted over $22 million towards rental assistance programs in over 5,400 rental units.

     

    Pennsylvania Foreclosure Help

    The state of Pennsylvania Housing Finance Agency and the US Department of Housing and Urban Development (HUD) have approved counselors who can help you free of charge to access programs and services for homeowners in danger of foreclosure. Pennsylvania Foreclosure Help is not just something that is important to keep our People in their Home during this housing crisis.  The Pennsylvania Mortgage Help Hotline is 1-8669845108. This way you are sure that the counselors you choose can really provide the help you need to evaluate your financial situation, explain the available options and work with your lender to arrive at a viable solution. So don´t leave your home-stay and call the hotline for help without delay.

    The longer you wait and the further behind you fall in mortgage payments the harder it will be to catch up. If you don´t get up to date with mortgage payments your lender could be allowed to sell your house to pay off the debts and this is a situation that too many, who find themselves in financial crisis have to face.

    One of the programs is HEMAP Homeowners Emergency Mortgage Assistance Program from which thousands of families have gained much needed help. This is the only program of its kind created by Act 91 of 1983 to prevent homelessness among the citizens of Pennsylvania and funded by state appropriations and repayment of existing HEMAP loans. The program assures regular mortgage payments making it possible for the house owners to look for employment or train for other work or receive needed education.

    This program is in fact a loan which must be repaid and it is not available for FHA Title II (purchase) mortgages. Those who are approved for HEMAP have the property in danger of foreclosure secured by a mortgage so creating a loan. There are two types available according to the financial situation of the owner. These are continuing mortgage assistance loans and non-continuing mortgage assistance loans. Those qualifying for a non-continuing mortgage loan have their mortgage brought up to date from which date the owner is responsible to keep up the payments to the lender as well as monthly repayment to HEMAP.

    It is possible that there may be an additional cash contribution toward the mortgage delinquency when the HEMAP loan closes. Those who are eligible for a continuing mortgage assistance loan have the mortgage payments brought up to date and then subsequent payments to the lender are subsidized. Both types of loans are limited to a maximum of 24 months from the date of the mortgage delinquency or a maximum of $60,000,00 whichever comes first. The homeowners benefitting from the loan are required to pay up to 40 percent of their income toward their housing expenses. $25,00 being the minimum monthly payment allowed by law. Thus the mortgage is paid and the family do not lose their home.

    Do you need help with your West Virginia mortgage? Looking for a new mortgage in West Virginia? If you live in West Virginia and need help with your mortgage or need assistance to buy a new home, we have news for you.

    Although West Virginia has suffered its fair share of hardship in the last three years, it is beginning to enjoy a modest recovery. The latest figures from the Bureau of Labor Statistics show a 1 percent drop in number of jobs in the construction industry from this time last year. An encouraging statistic when looking at the steep decline in the construction industry in previous years. The manufacturing, leisure and hospitality and information technology industries are all in positive figures, 1 percent, 4 percent and 4.1 percent respectively. Although far from being great news, these figures show a positive trend that points to better times for West Virginia.

    For example, in the third quarter of 2010, West Virginia saw an increase of 3.1 percent in the sales of new single-family homes. On the other hand, the sale of existing homes dropped by 2.5 percent from the previous quarter. This mishmash of growth and decline creates an opportunity for homebuyers with the cash and credit scores to overcome stringent bank loan requirements.

    To illustrate, prices for residential property are still low in West Virginia compared with the rest of the United States. The median single family home is priced at $129,370, while the median for the United States as a whole is $180,176.

    So, if you are in the market for a new home, West Virginia may be the place to look at for a new home.  You are unlikely to get more bang for your buck in a more beautiful setting. The West Virginia Housing Development Fund can provide a helping hand if you are looking for aid with your mortgage. This government sponsored fund provides assistance to first time buyers, reduction of federal income tax and an exciting new Secondary Market Program.

    These programs are designed to stimulate the housing industry and help workers, who otherwise couldn’t afford it, find the house of their dreams.

    So if you want to benefit from the West Virginia Mountaineer Mortgage Credit Certificate Program, the West Virginia Home Ownership Assistance Program or apply for a 3 percent downpayment mortgage with the West Virginia Secondary Market Program, read on. For a change, we have some good mortgage news for you.

    The final stage of a loan modification rescue is the three-month trial period.

    The final stage of a loan modification rescue is the three-month trial period.

    In this series of articles we have analyzed in detail the procedure you must follow to qualify for a loan modification. We have used Chase’s Loan Modification Program, but the same principle applies for Bank of America’s Loan Modification Program, CitiBank’s Loan Modification Program, Wells Fargo Loan Modification or any other of loan modification programs sponsored by lenders.

    As we discussed previously the first step is to call or visit your lender and explain your situation. You will need to provide your personal details and some documentation to back your claim. Then you will need to fill in a Homeowners Information Package, which will require more detailed information about your income, expenses, tax records and mortgage status. Once you file all that documentation your bank will review your case and decide if you qualify for a loan modification. If you pass the review, you still must pass a three month trial review before your loan modification is final.

    Trial Period Plan

    If you pass your lender’s loan eligibility review, you will be sent a loan modification agreement to sign. This agreement will describe the new terms of your mortgage, your new mortgage payments amounts and the starting date of your trial period. This three-month trial plan is designed to check if you can afford the loan modification. Understand that making your payments during this period is essential. It proves the loan modification is viable and works within your budget.

    Final Modification Program

    If you faithfully pay your mortgage during your three-month trial and the documents you filed with your lender are validated by your lender’s specialists your loan modification will be permanent. In this case your lender will send you a Final Modification Agreement. Read it carefully, make sure the new mortgage payments match the terms you agreed with your lender, sign it and send it back to your servicer. Your servicer will review the final agreement. If you pass this review, the loan modification will be final as long as you continue making your payments.

    As you probably gathered navigating your way though a loan modification is not easy. It requires patience, hard work and endurance to jump through all the hoops required by lenders. However, even with the best intentions you might not qualify for a loan modification. In that case, there are still other alternatives for homeowners at risk of foreclosure. These include desperate measures such as short sales and deed in lieu of foreclosure agreements. However, the truth is that foreclosure is a real risk for millions of American, and even with the best intentions, not everybody will qualify for a loan modification.

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    Photo by bhautikjoshi
    What does it do?

    This program works hand in hand with HAMP’s loan modification program. It is designed to help homeowners that are struggling to meet their mortgage payments because of a second mortgage on their home. The 2MP program helps homeowners reduce the payments on their second mortgage or even get rid of it altogether. 2MP does this by providing lenders with incentives to reduce interest rates, extend the term of the second mortgage to 40 years, or forgive a portion or the entire loan.


    Eligibility

    To qualify for a Second Lien Modification Program (2MP):

    –       Your first mortgage must already have been modified under HAMP (see program 1 above).

    –        The lender of the second mortgage must also be taking part in the Making Home Affordable Plan (i.e. Bank of America, Citi Mortgage, Chase, Wells Fargo and their subsidiary companies).

    –       The second mortgage must have started before January 2009.

    –       The mortgage must have a balance of more than $5,000 and monthly payments of more than $100.

    Used in combination with an HAMP loan modification a 2MP second lien modification could significantly reduce your monthly mortgage expenses. Click here to find out if you qualify.

    Is Obama’s Mortgage Assistance Reaching You

    090120-F-5586B-270.JPG 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.

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    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.

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    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.

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