Foreclosure alternatives are critically important these days. More and more homeowners are finding that they are faced with the unhappy dilemma of having to decide whether to pay the mortgage or to feed the children.
Several programs have arisen under the Obama administration designed to help homeowners deal with the devastating effects of the economic downfall. HAMP (Home Affordable Modification Program) and HAFA (Home Affordable Foreclosure Alternatives) are two such programs. Lenders who agreed to be part of the program are now obligated to offer certain homeowners the option of modifying their home loans.
Notice that I said “certain homeowners.” A homeowner must qualify before the loan modification becomes mandatory. The qualifying factors are:
• You must occupy the house as your primary residence.
• You must have obtained your mortgage on or before January 1, 2009.
• You must have a mortgage payment that is more than 31 percent of your monthly gross (pre-tax) income.
• You cannot owe more than $729,750 on your home.
• You must have a financial hardship and be either delinquent or in danger of falling behind.
• You must have sufficient, documented income to support the modified payment.
• You must not have 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.
There are many web sites dedicated to explaining these programs. I recommend that you check out www.makinghomeaffordable.gov, a U.S. government site. Take what you read with a grain of salt. This site explains what the government intended to happen, and does not address how the servicers have bent the rules to favor what is to them the more lucrative foreclosure path. If you have attempted to have your loan modified already and have been rejected, even though you were sure that you would qualify, don’t despair. A review of your application by a knowledgeable professional could be the only difference in remaining in or losing your home.