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It’s no secret to anyone that the United States has been facing a serious economic crisis for the last several years, which has negatively affected everything from overseas trade to local job loss and nationwide reductions in wages. Many families are literally struggling to meet their basic needs, and Oregon has been hit especially hard by the recession. Oregon homeowners who are facing foreclosure may qualify for assistance through a variety of different state and national programs, including the Oregon Homeownership Stabilization Program (OHSI), Home Affordable Modification Program (HAMP), The Home Affordable Refinance Program (HARP), and The Foreclosure Avoidance Mediation Program, as well as several others.
The Oregon Homeownership Stabilization Program (OHSI) was started in 2010, when the US Department of Treasury awarded Oregon $220 million as part of the “hardest hit” program, due to high unemployment rates state-wide. Several programs were designed based on feedback from various communities, to accommodate both rural and urban housing needs throughout the state, including:
- The Loan Refinancing Assistance Pilot Project- this program offers loans to assist “underwater” homeowners (meaning those who have negative equity in their home or whose current mortgage balance far exceeds the actual value of the home) in Deschutes and Jackson counties, who have recovered from unemployment or underemployment and can demonstrate the ability to afford repayment of a loan equal to the current value of their home.
- Mortgage Payment Assistance- Funded at more than $125,000,000, Mortgage Payment Assistance is the largest of the OHSI programs. At the start of the Mortgage Payment Assistance Unemployment program, more than 3,000 slots were made available, and openings are still available for those needing assistance.
- This program provides assistance to homeowners who are unemployed or otherwise facing financial crises, offering up to 12 months of mortgage payments or $20,000, whichever comes first. Full monthly mortgage payments are sent directly to the lender, and in some cases, participants may qualify for additional assistance with reinstatement of arrearages through the Loan Preservation Program, which is also part of the Oregon Homeownership Stabilization Initiative.
- Homeowners who sell or refinance their home before the five-year forgiveness period ends, and have sufficient equity after repaying their first mortgage will be required to repay the MPA loan.
- Loan Preservation Assistance- this program serves as the follow-up to the Mortgage Payment Assistance program, aiding homeowners who have gotten back on their feet to gain or maintain affordable mortgage payments, paying up to $20,000 to cover late payments or fees in order to bring their mortgage payments up–to–date, eliminating the immediate risk of foreclosure.
- Homeowners must be able to demonstrate their ability to sustain the mortgage payment if brought current to be eligible for this program. Once an applicant has qualified for the program, a one-time payment for the total amount of past due payments and fees up to $20,000 will be sent directly to their mortgage lender. A total of 2,000 openings will be available through the Loan Preservation Assistance program.
- Homeowners who sell or refinance their home before the five-year forgiveness period ends, and have sufficient equity after repaying their first mortgage will be required to repay the LPA loan.
So far, more than $60 million in funds has been dispensed to over 4,500 homeowners in Oregon, from the programs offered through OHSI. All participants in OHSI sponsored programs must complete the Homeowner Education program. The Homeowner Education program is a series of online videos that reviews budgeting tips, credit repair, debt repayment strategies, savings planning, and other financial education topics. The video series is designed to help Oregon Homeownership Stabilization Initiative program participants understand how to maximize their assistance.
The Foreclosure Avoidance Mediation Program, which started in July of 2012, is for homeowners who are at risk of default and would like to meet with their lender, and those who have already received a “Notice of Mediation” from their lender. The program requires participants to respond to any notices from their lender by the deadline specified in the notice, meet with a housing counselor, and pay a mediation fee of $200 (which may be waived to $50 if the participant’s income is less than 200% of the poverty level). Additional information regarding the program and access to application forms can be found at their website: www.ForeclosureMediationOR.org.
The Home Affordable Modification Program (HAMP) is a program of the Departments of the Treasury and Housing and Urban Development (HUD) that closely resembles the Loan Preservation Assistance program. In certain cases, it can be utilized in conjunction with the aforementioned programs. Designed for homeowners that are employed but still struggle to make their monthly mortgage payments, HAMP aims to lower these payments and make them more affordable and easier to sustain on a long-term basis. Homeowners who meet the following criteria may be eligible to participate in the program—
- Have a financial hardship and are either delinquent or in danger of falling behind on their mortgage payments.
- Obtained their mortgage on or before January 1, 2009.
- Have sufficient, documented income to support a modified payment.
- Owe up to $729,750 on their primary residence or single unit rental property, up to $934,200 on a 2-unit rental property; $1,129,250 on a 3-unit rental property; or $1,403,400 on a 4-unit rental property.
- Have NOT been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.
- The property has not been condemned.
The Home Affordable Refinance Program (HARP) offers refinancing options to homeowners who are up-to-date on their payments, but unable to obtain refinancing through traditional means due to their home depreciating in value after purchase. HARP refinancing loans are an opportunity for eligible homeowners to receive stable, more affordable, new mortgages. Like other loans, an application and underwriting process are required, and refinancing fees do apply. Eligibility requirements include the following criteria:
- The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
- The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
- The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March through May of 2009.
- The current loan-to-value (LTV) ratio must be more than 80%.
- The borrower must be up-to-date on the mortgage payments at the time they are financed, with a good payment record over the past 12 months.
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