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.

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. 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.

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.

Photo by bhautikjoshiWhat 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

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.

Will the government mortgage help plan stabilize the housing market Obama has some new sweeping government mortgage initiatives that will assist new home buyers and help those whose mortgages are more than they can currently bear financially. The broad spectrum hopeful fix will use money from the government to help subsidize the rates and assure that the lenders don’t fall prey to the falling prices of homes.

The plan, about 75 billion dollars worth, has several facets and will allegedly assist about 9 million borrowers who are suffering from the falling prices of homes and monthly payments that are astronomical in nature. The foreclosure fix is a steep departure from that of the Bush era politics which relied for the most part on having the lender modify their rates for mortgages that were in trouble. Obama’s plan, it is said will make it easier for the home owner to afford their monthly payment by refinancing the mortgage,as well as putting in billions of federal dollars into tempting those companies to modify the loads of the people who have already stopped their mortgage payments nationwide. IT is being said the program, while voluntary in nature, contains a mingling of both carrot and stick, temptations for the loan servicers and investors, as well as offering a big stick on the guise of working with Congress to permit judges to modify the mortgages of those who do fall behind before the borrower has lost their home. This is a step that the community believes is a good step toward assisting home owners financially to keep their equity in their home, but is not well received by the financial community.

Obama, in a speech in Mesa Arizona, a community which has been quite hard hit by the financial and mortgage issue. . . “In the end, all of us are paying a price for this home mortgage crisis,” Obama said. “And all of us will pay an even steeper price if we allow this crisis to deepen — a crisis which is unraveling homeownership, the middle class, and the American Dream itself. But if we act boldly and swiftly to arrest this downward spiral, every American will benefit.” The act, which is being hailed by Democrats could conceivably reduce the numbers of people who are losing their homes, but with strict limitations, could also be problematic. The Republican party however decries the cost of the bailout, saying it will cut into the pocket of every man woman and child in America.

Obama Administration Rescues Homeowners

With bills piling up and wages staying the same or decreasing, homeowners are wondering where to turn.  Thankfully, the Obama administration has come to the rescue with loan modification and refinancing programs.  Lenders and borrowers have new incentives as Obama races to stall the flood of foreclosures.

To determine if you are eligible, you can go to their website, MakingHomeAffordable.gov, which asks you a few questions.  The goal of the Obama administration is to help 7 to 9 million people reduce their mortgages and save their homes from threat of foreclosure.  The two main programs are the Home Affordable Refinance Program and Home Affordable Modification Program.

The Home Affordable Refinance Program provides assistance to up to 4 to 5 million homeowners which are owned by Fannie Mae or Freddie Mac.  It allows them the chance to refinance their homes to bring down the cost of their monthly payments.   It can also help by changing the homeowner from a risky adjustable rate mortgage to a more stable one.

The Home Affordable Modification Program has set aside $75 billion with the intention of helping millions of Americans avoid foreclosure.  A borrower participating in this program will find plenty of incentives to keep payments current.  For example, a borrower can get up to $1,000 pay-for-performance, which goes directly towards paying the principal of the loan.

However, as helpful as the MakingHomeAffordable.gov site is for seeing if you are eligible for one of the programs, qualifying for a loan modification is too complex to be written into any one software system, so you should discuss options with a professional.  A mortgage servicer or a housing counselor can provide assistance even if the website declares you are not eligible for assistance.

If your mortgage is owned by Fannie Mae or Freddie Mac, you can make use of the portion of the site which walks you through a series of questions to see if you qualify for refinancing.  Payments on your mortgage must be up to date to take advantage of refinancing.    If you’re not sure if your mortgage is owned by Fannie Mae or Freddie Mac, use the site to find out.

To get the maximum benefit, be sure to double-check required fields, such as address and social security.  Remember the saying “garbage in – garbage out”, your results are more accurate if you can provide accurate information.

Even if the site says you are not eligible for assistance, you can talk to a counselor approved by the Department of Housing and Urban Development.  If you are already behind on your payments and require help right away, you can reach a counselor by dialing 1-888-995-HOPE (4673).

The website contains a helpful checklist to go through before contacting a counselor and also contains helpful advice to avoid foreclosure rescue scams.

Owning your home is part of the American dream.  You have worked hard for your home, don’t give it up without a fight.  You have resources you can use to save your home, so make good use of them.