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  • The Home Affordable Modification Program provides borrowers with the chance of permanently modifying their mortgage to a monthly payment they can afford. Not only that, the program can also help borrowers change their mortgage from a high-risk variable rate loan to a stable fixed-rate loan. However, for you to qualify for a Home Affordable Modification Program you must first complete successfully the program’s Trial Period Plan.

    Many borrowers get confused about the requirements of the Trial Period Plan, fail the trial and lose the chance of saving their mortgage from foreclosure. This article provides information on how to meet the Trial Period Plan requirements. The article is based on information provided by the Departments of the Treasury and Housing and Urban Development through their MakingHomeAffordable.gov website.

    Step 1: Fill in the three documents in the Home Affordable Modification Program Initial Package: 1) Request for Mortgage Assistance Form, 2) Tax Form 4506T-EZ (or Form 4506-T) and 3) the Verification of Income form. These documents can be downloaded by clicking here. Print two copies of each document, one for your mortgage servicer and one for your records.

    What state are you in? Please select an item.

    Behind on your mortgage payments?: Please select an item.

    Estimated mortgage balance owed? Please select an item.

    Who is your lender? A value is required.

    First Name: A value is required.

    Last Name: A value is required.

    Primary Phone Number: A value is required.

    Secondary Phone Number:

    Your Email Address: A value is required.

     

    If you have trouble understanding the documents and you are not sure how to complete them, call 1-888-995-4673 and request to talk with a housing counselor. This service is free.

    Step 2: Send the documents to your mortgage servicer. You can find the address of your mortgage servicer by visiting this website. This service is provided by the MakingHomeAffordable website and includes all the mortgage providers who are enrolled in the HAMP program. The list of mortgage providers is organized alphabetically and provides the name, phone, address, fax number of all participating mortgage providers.

    Step 3: Check your mortgage provider has received all the forms and documents they need to confirm your eligibility for the HAMP program. Do this as soon as possible because if you are missing a form or have made a mistake in filling the forms you will need to correct the mistake or send the missing document before your trial period ends.

    Step 4: Make all your mortgage payments. This is crucial. Once of the main purposes of the trial period is to check the modified loan is suitable for you. In other words, your mortgage provider and the government want to know if you can afford the new mortgage payments. If you do not pay your monthly mortgage payments regularly during the trial period, you will not be granted a permanent loan modification.

    The Obama administration has increased efforts to assist owners remortgage their house loans, often times bringing relief to a lot of individuals that owe a lot more than their houses are priced. This is an late move that should strengthen consumer spending, even though it will probably not avoid 1000s of property foreclosures. The latter downside necessitates additional aggressive and successful loan modifications, which usually financial institutions and backers have been completely hesitant to do – to their own personal hinderance.

    The fall of the housing market has left an estimated 14 million People owing more on their home loans than their houses are effectively worth. Though about seventy % of the “under water” debtors have financial loans with interest levels greater than can be found nowadays, the absence of security has kept them from re-financing into different, less costly loans.

    On Monday, Fannie Mae Mae, FreddieMac and their regulator, the FHFA, announced a more ambitious refinancing program that might allow another two million under water debtors that are not in arrears to obtain new products. These re-financings will probably decrease the dividends that Fannie Mae, Freddie and various investors were standing to obtain from the financial products, but that’s the typical associated risk experienced by individuals that purchase mortgage backed securities. More significant, by reducing homeowners’ financial debt repayments, the refinancings can increase consumer trust and maximize spending, driving ahead the country.

    The decrease in monthly bills should likewise prevent some home owners who aren’t in arrears these days from going into property foreclosure. But it really won’t give much support to the believed .2 million people Moody’s Analytics expects to lose their homes in 2012. Loan companies could cut their losses increasingly by changing mortgages to decrease the monthly bills of defaulting men and women, and they’ve attempted a range of techniques with limited success. But they have been against at what authorities say would be the most efficient action – writing off part of the customer’s debt – as it features a higher upfront cost. Lenders also say there is a moral danger in bailing out credit seekers that are not able to repay the money they owe.

    The reason why won’t Fannie Mae and Freddiemac put down mortgage loan amounts? You will discover three wide factors. First, the firms warrant $5 trillion in mortgage products, of which close to 20 % are under water. However the vast majority of these underwater mortgage loans close to 87% for FreddieMac are up-to-date. The firms are hesitant to reduce loan balances because of a concern that will produce a moral hazard that causes other people to go into default.

    Second, Mr. DeMarco claims that the companies existing efforts to switch house products are successfully lowering borrowers monthly bills to cheap levels without the pricey step of forgiving financial debt. Fannie Mae and Freddie are guaranteed totally by tax payers and have amassed a $145 billion tab thus far, and the FHFA is charged with conserving the firms’ assets. In a recent interview, Mr. DeMarco said that principal forgiveness isn’t called for considering the fact that mandate.

    Third, a lot of under water mortgages frequently are covered by home finance loan insurance, which reimburses Fannie and Freddie for portion of the damage any time those financial loans go delinquent and move through foreclosure. The result is the fact even just in cases when it could build economical wisdom for that mortgage to be have its principal reduced, it still isn’t in the economic interest of Fannie or Freddie to write down certain mortgages.

    Why aren’t Fannie and Freddie part of the foreclosure settlement? Just as Fannie and Freddie don’t even make products, additionally they don’t handle the day-to-day management of those products, or what’s named “mortgage servicing.” Instead, they count on countless corporations, but mainly great banks, to service their products. They launch detailed directions with what methods servicers have to take, together with timelines they should fit to foreclose on consumers that haven’t qualified for just a home finance loan modification.

    The existing property foreclosure funds are focused on financial institutions that didn’t effectively service home products. While Fannie Mae and Freddie, the 2 main largest sized house loan investors in the U.S., plainly couldn’t stop the enormous crisis in mortgage servicing (and some have contended they turned a blind eye), the businesses by themself don’t service house products. That’s one massive grounds they aren’t a party to the arrangement.

    What could the settlement accomplish? Beneath the terms and conditions currently being talked about with banks, they would need to pay close to $25 billion in penalties or fees. Around $5 billion is paid in income. Another $3 billion could be expended by mortgage refinancing upside down applicants whose financial loans are on the banks’ account books. The residual $17 billion can be spent on housing relief efforts, generally by writing down mortgage loan balances for under water applicants who’re struggling to produce their payments.

    Could the negotiation apply simply to financial loans that lenders own? That’s still up in mid-air. To start with, the Federal government had pushed for the arrangement to require lenders to write down mortgage loan balances for borrowers whose financial products they maintained but didn’t own. The reasoning driving that move was that traders, in conjunction with people, were being hurt by servicers’ inability to correctly handle affected products.

    Although lenders have clearly resisted that tactic as it would likely involve them to really pay financiers. As an alternative, the latest negotiation talks have concentrated on permitting institutions to pay their fees by writing down mortgage loan balances on home financial products that they maintain on their account books. Close to 20 % of all mortgages in the U.S. are held on bank balance sheets.

    The State of Vermont introduced a battery of rules and regulation changes to help streamline the financial industry and protect homeowners who are at risk of losing their homes. An important element in the protection of Vermont homeowners is the Vermont Mortgage Assistance Program.

    The Vermont Mortgage Assistance Program is managed by the Vermont Banking Division and is responsible for providing advice, information and assistance to residents who have been affected by the mortgage crisis and who are struggling to make mortgage payments. However, it is important to note the Mortgage Assistance Program does not have any actual funding to provide cash payments to borrowers. Nevertheless, the Mortgage Assistance Program can help by providing quality advice and by facilitating the communication between borrowers and lenders.

    According to the information provided at the Vermont’s Mortgage Assistance Program, the most important thing to know when you are facing mortgage issues is that time is of the essence. The sooner you deal with your delinquency problems the more options you have and the more likely you are of saving your home from foreclosure.

    A foreclosure will typically take six to nine months to complete. This is important because even if a lender is willing to try and negotiate a settlement, it is unlikely the lender will stop the process while the settlement is negotiated.

    The Vermont Mortgage Assistance Program also offers mediation services between lenders and borrowers. It also provides advice on how to arrange for loss mitigation with your lender. Loss mitigation is a negotiation between borrowers and lenders that studies the options a borrower has to restitute payments in arrears while reducing payments to a level that is affordable and realistic considering the financial situation of the borrower.

    If your borrower is not willing to negotiate a solution, the Vermont Mortgage Assistance Program can help you get in touch with local institutions that offer refinancing options to borrowers. A government program that offers refinance and mortgage modification options is HOPE, which may be a useful resource.

    Another point highlighted by Vermont’s Mortgage Assistance Program is the fact that in some cases losing your home is the best alternative. Trying to save your home at all casts may perpetuate a bad investment you can’t afford and are better off without. The program can suggest foreclosure alternatives that provide the least damaging alternatives for your credit rating.

    Contact the Vermont Mortgage Assistance Program by clicking here or calling (802)-828-568-4547.

    Hawai Mortgage Help

    The Department of Hawaiian Homelands DHHL accepts applicants who wish to participate in programs which help those who qualify for aid that is Native Hawaiian Families who have an income of 80% or less of the HUD local area average. They must also be eligible to live in Hawaii. The applicants who wish to develop programs with the aim of helping in this regard can be local, non-profit or for-profit organizations. The programs can receive funding grants starting at $10,000. The programs can be eligible for funding if they are for Development including making affordable housing available, giving down payment or closing cost loans or direct lending.

    Housing Services which could include payments to prevent foreclosure. Housing Management such as loan processing and managing projects for affordable housing. There are other categories too. The Projects are to help the beneficiaries who meet the requirements over a year or more if necessary and must be related to the DHHL Native Hawaiian Housing Plan objectives. These objectives include making reasonably priced housing available for Hawaiian families of low income.

    To understand the process of home buying and especially of first-time home purchase Homebuyer Education is vital. In Hawaii, those who are not too seriously disadvantaged financially and who can with the help of a counselor go through the necessary steps to property purchase, are directed to Level 1-Basic Management Homebuyer Education. Clients at level one will find that within six months to a year they are prepared to manage a mortgage. They are helped to prepare a plan of action, to develop a budget and shown how to achieve better credit scores. Aid is provided toward debt reduction as well as improving savings and income so that once they are on track with a mortgage the counselor won´t need to do very much to help the client to successfully buy the chosen property. If the client needs longer than a year to be prepared to take on a mortgage then the Level 2 Intensive Case Management Homebuyers Education Program is followed. The counselors will help the client to improve his credit rating and greatly reduce his debt as well as to save money and earn more so that the mortgage loan is a possibility.

    This is the same as in Level 1 but it will take more time to achieve the desired result. Due to the present financial crisis it is increasingly difficult to access credit and to qualify for a mortgage people have to meet quite strict qualifications. For this reason Post Home Ownership Counseling and Lease Cancellation Prevention is very important for those who are for the first time taking steps to buy a house. Counseling is available so that clients can be prepared in advance and ready to deal with financial difficulties such as losing employment, medical expenses or heavy debt. So that they can adapt successfully to the situation and avoid foreclosure service providers will help find different solutions toward financial planning which will go a long way to prevent mortgage foreclosure or lease cancellation. Hawaii is in this way helping Hawaiians become responsible homeowners.

    South Dakota Mortgage Help

    South Dakota Mortgage Help

    The loan assistance which the South Dakota Housing Development Authority provides is known as LAP which is The Loan Assistance Program. The idea is that down payment and closing costs when buying a home can be prohibitive. For this reason they are taken care of by the program as long as the first mortgage for the property is financed through a lender who is participating with the South Dakota Housing Development Authority (SDHDA). Because the LAP loan has a very low interest rate (5.0%) and the monthly payments are reasonable, it makes owning your home a real possibility. The maximum loan available is $5,000 over a period of five years. SDHDA provide the assistance loan on condition that your take Homebuyer Education classes with an approved center to ensure that you really understand all the steps you are required to take when buying property. The actual monthly payments you make for your LAP loan will be included in your regular mortgage repayments each month. In effect the LAP loan is a second mortgage as is EMAP which is the Employer Mortgage Assistance Program. However with EMAP the amount you may borrow is a minimum of $600 up to the maximum of $6,000 over a period of 5 years and the interest rate is 2% only. To apply for this type of loan you will need to contact a participating lender and have an eligibility certificate which you can get from your employer, who must be a participating employer. As is the case with the LAP loan the EMAP loan is repaid together with the first mortgage loan and you can have it paid automatically from your bank account to the lender each month if you wish. If you obtain an EMAP loan with the cooperation of your employer but before the end of the 5 years period you change employment and therefore no longer work for the same boss your interest rate will be changed from the 2% to the prime rate plus 5%. This arrangement is provided for in the “Addendum to the Promissory Note” which you sign when you close the loan. Your participating lender might have other important details which you will need to take into consideration when you take out the loan. With the Down payment Assistance Loan there is not a prepayment penalty to worry about. If you sell your home you are required to settle the amount of the Down Payment Assistance Loan. SDHDA will inform the person who closes the sale of the amount to be paid so that the loan can be paid off. In this way SDHDA is able to assist many people to purchase their own home. The Homebuyer Education classes are very important in helping you to know what to expect and how to go about your property purchase in the best way. Please take advantage of these provisions.

    The state of Mississippi knows that one of the main difficulties people face when trying to find a suitable home is the upfront money needed for the down payment. People require help in this regard and also when it comes to the payment of closing costs. For this reason the Mississippi Home Corporation has arranged for a Down Payment Assistance Program designed to help those of low to moderate income to buy their first home. First time homebuyers with a low or moderate income and who have an acceptable credit rating are eligible if they meet the credit eligibility requirements and have need of a second mortgage to pay the down payment.

    They are also required to complete an 8 hour homebuyer training course.

    The Down Payment Assistance Program consists of a first mortgage (FHA, VA, or RD qualifying guidelines) and a second mortgage with a ten year fixed rate f 7%. The maximum down payment assistance is 3% of the loan amount and it can be used for closing costs too. It is required that the applicant´s liquid assets not exceed $4,500. The property must be the primary residence of the owner.

    The Mississippi Home Loan Plus Program Grants of up to $14,999 are available for low income homebuyers who meet the requirements. The funds provided to the Mississippi Home Corporation (MHC) by the Mississippi Development Authority(MDA), Community Service Division are to make it possible for those who otherwise could not purchase a property of their own to acquire their first home. There are certain requirements that are to be met in order for the grant to be awarded. For example the property to be purchased must meet section 8 Housing Quality Standards so must have written clearance from a US HUD approved appraiser or it must meet local housing quality standards in areas that have their own local building codes. It should be noted that the whole County of Harrison and the City Hattiesburg as well as the City of Jackson are not eligible for this program. The grant can be used with the MHC programs Mortgage Revenue Bond with no cash advance (MRB) and Mortgage Credit Certificate(MCC).

    The applicant must be a US citizen or qualified registered alien who has a social security card and it is required that the homebuyer have Homebuyer education with a housing counselor approved by HUD. The household income must be below 80% of the average household income according to the size of the family. The limit as to Purchase Price is $150,000. The buyer must purchase the property by permanent fixed-rate mortgage through a lender approved by MHC. As for the property itself it must be located in an area that is eligible for the grant and it must be the primary residence of the buyer. The home to be purchased must not be in a flood zone. To qualify the property has to be a site built single family home. Condos and town homes do qualify. If the construction is newly built it must be complete. Properties built before 1978 will be subject to a lead based paint inspection and test. Anyone who would like to participate in the program can find a participating lender list as well as a homebuyer guide on line.

    Applying for a mortgage can be a daunting exercise, especially if you have made financial mistakes in the past and feel that your credit score may interfere with your loan application. This also applies to government subsidized loans through agencies such as the Federal Housing Administration which offers low-cost mortgages to medium- to low-income families. However, if you feel your credit rating will get in the way of your home purchasing dreams, take heart, this is not necessarily the case. Although your credit score is a significant factor when applying for an FHA loan, it is not the only factor. The FHA lending and underwriting rules allow for flexibility with reliable lenders which may have had some credit hiccups in the past.

    So what are the FHA rules on lending? This article provides a brief overview on what the FHA looks at when assessing a loan.

    There are four factors that determine the eligibility of a borrower to a loan: credit history, steady employment, debt-to-income ratio and your payment history in the last 12 to 24 months. This means that if your credit score is low because of a financial problem or mistake you made several years ago, but you score well in the other areas, you may still qualify for an FHA loan. Nevertheless, what constitutes a good or acceptable credit score for the FHA? This depends on the loan, but the FHA does have a general standard for most of its loans.

    The FHA and Credit Scores

    The FHA applies a sliding scale rule on loans depending on the credit score of the borrower. Borrowers with a higher credit score can apply for a higher loan to value percentage of the purchasing price of a property. For example, credit scores between 500 and 579, which would be considered very low by commercial lenders without the insurance of the FHA, can qualify for a maximum of 90 percent of the loan to value rate of the property. If your credit score is higher than 580, you may be eligible for the maximum FHA loan financing, as long as the other areas are also satisfied. If your credit score is below 500, you are not eligible for an FHA loan.

    Therefore, the answer to the initial question of this article, the minimum credit score to be even considered for an FHA loan is 500. Anything less and your application will not even be considered. However, even applicants with credit scores as low as 500 to 600 can qualify for loans as long as the other elements the FHA looks into are above board.

     

    In the current economy, few of us have the savings or income to finance the purchase of a brand new home. Even second hand homes in prime condition can be out of the reach of the average household. So what can you do if you need a new home or you are a first-time buyers looking to buy yourself a slice of the American dream? A good option for many, especially those not scared to invest some sweat and elbow grease in their home, is investing in a fixer upper and doing or at least supervising the work required to make the home livable again.

    Rehab Loans with FHA

    If that is your plan, you can get government mortgage assistance from the Federal Housing Administration. The FHA has a specific product for buyers interested in saving money and investing money and hard work in a fixer upper home. If you know where to look (think foreclosures, auctions, repossessions…) you can buy homes that have fallen into disrepair and need some heavy doses of tender loving care at bargain prices. Remember banks, which more often than not end up with dilapidated homes, are not in the real estate industry; they are in the lending business. So, they are often very happy to unload properties in need of renovation.

    The loan you may be looking for is the FHA’s 203(k) Fixer Upper Loan. This product is based on the Housing and Urban Development’s, HUD, 203(k) program and allows buyers invest in fixer-uppers with a FHA guaranteed loan. The best things about this loan is that it is especially designed for fixer-uppers and comes with an inbuilt protection for borrowers if the repair work costs more than they expected. And let’s face it, it is next to impossible to estimate accurately how much a fixer-upper will cost to get back into shape until you actually get started.

    How Do You Apply?

    As usual, the FHA does not provide loans directly to borrowers, but uses lending partners. Approach a selection of lenders and request information on their 203(k) fixer-upper loans. The application process is similar to a normal FHA loan. The lender will go through the regular credit checks and debt-to-income analysis. In addition to the basic paperwork requirements of an FHA mortgage, you will need to provide a detailed list of the repairs the property requires and the estimated cost of those repairs.

     

    News of the approval by the House of Representatives of the Emergency Homeowners Loan Program has fed the hopes of those that though the program would never start. Now only the signature of the Senate remains, many unemployed workers who are at risk of losing their homes to foreclosure may again put their hope in a mortgage assistance program that can see them through their temporary financial difficulties until they find work again.

    However, not all states are participants in this unemployed workers mortgage assistance program, up-to-date only 27 states were part of the scheme. These states included 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.

    Since the news of the approval of the House of Representatives, five more states have announced similar programs which will also receive funding through the Dodd-Frank Act. The Housing and Urban Development Department will also have a monitoring and supervisory role in these programs, although it will delegate most of the management roles to state level agencies (both governmental and non-profit community organizations). These states include Pennsylvania, Maryland, Connecticut, Idaho and Delaware. Although they are not part of the sates that applied for the Emergency Homeowners Loan Program the programs they are now offering their citizens are very similar. Since April 2011, they have accepted applications from unemployed workers who are delinquent on their mortgages. To qualify, an unemployed worker must be at least 3 months behind in his mortgage payments and have received a notice from his lender warning her of the intention of foreclosing on the mortgage.

    Successful applicants will receive bridge loans of up to $50,000 to help them cover late payments, insurance, tax and ongoing mortgage payments for up to 24 months. The programs are restricted to unemployed workers who have a debt to income rate of 55 percent of less. This means the total monthly housing payments must represent less than 55 of their total income. For example, a household with an income of $4,000 a month, must not pay more than $2,200 in mortgage and other housing expenses.

    These five states also have similar assistance programs under their respective housing finance agencies, which has moved the Housing and Urban Development Department to allow them to start accepting applications before the other 27 states which are part of the EHLP.

    The California Housing Finance Agency is California’s main housing agency. It has several mortgage assistance programs designed to both help first-time buyers purchase a home and assist those that already have a home keep it. Those programs designed to protect Californian homeowners from foreclosure are under the Keep Your Home California program, which provides up to $2 billion in cash for foreclosure prevention programs. However, previous eligibility criteria was too stringent to allow many struggling homeowners qualify for assistance. The California’s Housing Finance Agency has reduced the requirements of these programs to help more struggling homeowners benefit from them.

    Unemployed Workers

    Under the new rules unemployed workers who are at risk of losing their homes can request federal mortgage assistance of up to $3,000 a month. Similarly, homeowners who are facing financial hardship can apply for up to $15,000 a family to reinstate mortgages at risk of foreclosure. Even homeowners who have no choice but to let their homes go can apply under the new rules for assistance for relocation expenses. These and many other changes have been backdates to mortgages originated after January, 1, 2009. This means that even if your application for help previously put down, you may reapply and see it approved under the new rules.

    These changes have come after the California Housing Finance Agency collected information on the existing programs and identified the areas where improvements were required. One of the main factors considered were the ongoing high-rates of unemployment in California which increased the risk of households, which had previously being regular with their mortgage payments, would lose their homes to foreclosure.

    The California Housing Finance Agency acts  as an intermediary between the Housing and Urban Development and servicers in some programs and as principal program manager in others. The servicers used by the CalHFA include the Guild Mortgage, GMAC, the California and the Department of Veteran Affairs. Funding for the programs originates from the Housing and Urban Development Department and the Dodd-Frank Act. Funds of up to $1 billion have been assigned to unemployed workers struggling to pay their mortgage and over $450 million will go to the State of California. Other states that have relaxed the eligibility criteria of their mortgage assistance programs and will receive assistance from the Dodd-Frank Act include Delaware, Idaho, Pennsylvania and Maryland.

    One of these programs, is the Emergency Homeowner Loan, which is available for unemployed workers who had an income of 120 percent the median income and who had seen their income drop by at least 15 percent since they lost their job.

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