Mortgage Refinancing, Modification, and Grants

In the recent economic malaise and real estate decline, many government programs and nonprofit organizations are responding with unprecedented assistance for homeowners in financial difficulty.  Listed below are a few of the leading national programs and organizations that can provide assistance.  Short descriptions of programmatic offerings, procedures, and contact information are provided.  Remember, legitimate foreclosure avoidance assistance is always provided free of charge.  If an individual or organization asks for any upfront money, it is, more likely than not, a fraud.  Homeowners in danger of foreclosure should never pay for help, and should instead seek assistance from HUD-approved nonprofit housing counseling agencies, including those found at www.findaforeclosurecounselor.org and www.makinghomeaffordable.gov.

Program 1:
The HOPE NOW organization provides a nationwide hotline for people needing immediate help.  HOPE NOW is an alliance between counselors, mortgage market participants, and servicers to create a unified, coordinated plan to reach and help as many homeowners as possible. The hotline, managed by the Preservation Foundation, is the cornerstone of a foreclosure prevention effort supported by many of the country’s largest mortgage companies. The HOPE hotline provides free, independent, bilingual, HUD-approved counseling and advice 24 hours a day. Help begins as soon as the homeowner calls. The earlier a borrower seeks assistance, the more options are available to ensure the borrower can keep his/her home. For more information call 1-888-995-HOPE or visit www.995hope.org.

Program 2:
The NeighborWorks America organization provides financial support, technical assistance, and training for communities across the nation through the NeighborWorks network of over 235 nonprofit organizations covering nearly 4,500 urban, suburban, and rural communities. These organizations engage in revitalization strategies that strengthen communities and transform lives. In the last five years alone, NeighborWorks organizations have generated more than $12 billion in reinvestment and helped more than 845,000 families of modest means with less than perfect credit, purchase or improve their homes.

The NeighborWorks Center for Foreclosure Solutions, an initiative of NeighborWorks America, was created to preserve homeownership in the face of rising foreclosure rates.  In conjunction with national nonprofit, mortgage and insurance partners, the Center builds capacity among foreclosure counselors around the nation, conducts public outreach campaigns to reach struggling homeowners, and researches local and national trends to develop strategic solutions. To learn more about foreclosure intervention efforts visit www.nw.org/ForeclosureSolutions.

Program 3:
Money Management International (MMI) is a national HUD-approved housing counseling agency and nonprofit credit and debt counseling firm. MMI has been helping consumers trim their expenses, develop a spending plan, and repay debts since 1958. Counseling is available by appointment in branch offices and 24/7 by telephone and Internet. Services are available in English or Spanish.

MMI has recently expanded its Preserving Homeownership and Savings Education Strategy (PHASES) program. What differentiates the PHASES program from other programs is that it provides grants for up to $7,500 to qualified homeowners who are striving to recover from a temporary financial setback and become current on their mortgage. As part of the program, the PHASES team provides one-on-one financial counseling sessions to help keep families in their homes and effectively manage their personal finances.

The PHASES program is currently available to homeowners in Arizona, California, Connecticut, Florida, Illinois, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, Ohio, Pennsylvania, Texas, and Virginia. To learn more about the MMI PHASES program, call 888-589-6959 or visit www.mmiphases.com. 

Program 4:
The Making Home Affordable Plan, introduced by the Obama Administration, is an effort to stabilize the housing market and help American’s reduce their monthly mortgage payments to more affordable levels. The plan is structured around two primary components—mortgage refinancing and mortgage modification.

Mortgage Refinancing: This program assists the homeowner who is current on their mortgage payments but unable to refinance to a lower interest rate because the home value has decreased.
Eligible applicants must be:

• the owner of a one- to four-unit home
• with an existing loan owned or guaranteed by Fannie Mae or Freddie Mac
• current on their mortgage payments and have not been 30 days late making a payment within the past 12 months
• their mortgage is no more than 105% of the value of their home.

For example, if the property is worth $200,000 but the homeowner owes $210,000 or less on the first mortgage, they may be eligible. The current value of the property will be determined after application.

Mortgage Modification: This program assists homeowners who can no longer afford to make their monthly loan payments.  Millions of borrowers who are current, but having difficulty making their payments and borrowers who have already missed one or more payments may be eligible.
To apply for a Home Affordable Modification, you must:

• be an owner-occupant in a one to four unit property,
• have an unpaid principal balance that is equal to or less than $729,750 for one-unit properties (higher limits apply for multiunit properties).
• have a loan that was originated on or before January 1, 2009,
• have a mortgage payment (including taxes, insurance, and homeowners association dues) that is more than 31% of your gross (pre-tax) monthly income, and
• have a mortgage payment that is not affordable, perhaps because of a significant change in income or expenses.

For more detailed information about these programs along with self-assessment tools and calculators visit www.MakingHomeAffordable.gov.

As we continue to chart unprecedented economic conditions, many organizations and programs are now in place to assist struggling homeowners.  This assistance is FREE, and only begins when the homeowner asks for help.  If you need assistance, take that first step now, call 1-888-995-HOPE (4673). The hope begins with just one call!