Foreclosure Programs

Author: Housing Editors

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Federal Foreclosure Programs

Even with record low interest rates, a lot of borrowers still struggle with their mortgage payments. The economy is still recovering slowly and foreclosure programs are essential to keep it going in that direction. It’s in the best interest of lenders and the government to find ways to help underwater borrowers pay their mortgages.

HUD has many programs to assist and help homeowners avoid foreclosure.

The Making Home Affordable © (MHA) Program groups together many programs to lowers monthly mortgage payments by getting today’s low rates. Among the programs are Home Affordable Unemployment Program (UP) for unemployed homeowners. To help homeowners who owe more than their homes are worth there is Home Affordable Refinance Program (HARP) and Principal Reduction Alternative (PRA)

Home Affordable Modification Program (HAMP) :

This program helps by lowering your monthly payments to 31% of your gross monthly income. This usually results in a drop of around 38% of your monthly mortgage payment.

The Federal government expanded the eligibility of homeowners that can be qualify for this program. Click on the following link to find out more information about HAMP.

Pros : Helps make your mortgage payments more affordable for long term sustainability.
Cons : Pushes back your last mortgage payment by diminishing the amount of principal in each mortgage payment.

Principal Reduction Alternative (PRA) :

If you owe more than the value of your home on your mortgage, this program might be good for you. It encourages mortgage lenders to reduce the amount you owe on your home.

Pros : It can reduce your mortgage by a significant amount.

Cons : Not all mortgage servicers offer this program.

Home Affordable Refinance Program (HARP) :

This program is for homeowners who are not behind on their mortgage payments, but can’t refinance because the value of their property has declined. If you find yourself in this situation, the HARP program could help you refinance into a more affordable and more stable mortgage.

Pros : Helps your financial stability.

Cons : Refinance fees will apply.

Home Affordable Unemployment Program (UP) :

If you find yourself unable to make your mortgage payments because you are unemployed and don’t have the income you need, this program could help you by reducing or suspending your mortgage payments for 12 months or more, giving you time to find a job. Click here to find out if you are eligible for UP.

Pros : UP gives you the opportunity to focus on finding a job without the stress of making your mortgage payments
Cons : You are not eligible for UP if you previously received a HAMP modification.

Home Affordable Foreclosure Alternatives (HAFA) :

This program is for homeowners who can no longer pay their mortgage payments and are willing to transition into more affordable housing. If this corresponds to your situation, HAFA can help you through a short sale or a Deed-in-Lieu (DIL) of foreclosure. In the case of a short sale, the mortgage lender lets you sell your home for an amount short of the amount you still owe. In the case of a DIL, the lender lets you give the ownership title back to them.

Pros : If you qualify, you can get relief from your mortgage payments and start fresh. HAFA also has a less negative effect on your credit than foreclosures and conventional short sales. The program might even provide you with up to 3,000$ in relocation assistance when you close.

Cons : Going through with HAFA means giving up your home.

Foreclosure Resource Centers was established by The Federal Reserve System and support by the federal government. Mortgage Foreclosure Resources offered by The Federal Reserve System operates foreclosure centers, where you’ll find resources for small municipalities, housing counselors, and consumer and community groups