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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.
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