Tuesday, 16 April 2013

Let The Government Help You Prevent Foreclosure

The housing market has a profound effect on the economy. The consumer’s ability to buy homes using loans, and retain the financial ability to maintain ownership through the life of the loan is essential to a healthy economy. When people are forced into unfortunate circumstances such as foreclosure their finances can be hurt for years in much the same way bankruptcy affects a healthy consumer. Therefore over the past few years the government has recognized this problem and taken it head on by creating the Making Homes Affordable Program.

Programs designed to stop foreclosure

Government programs to stop foreclosure are expanding each year to include a broader spectrum of homeowners. Homeowners can now lower their monthly mortgage payments and get into loans that are far more stable and coincide with today’s low rates. Here are some programs to stop foreclosure the homeowner should consider when seeking help from the government.
  • The Homes Affordable Modification Program (HAMP) lowers your monthly mortgage payments up to 31% of your verified monthly gross income before taxes. This typically results in a 40% drop in monthly mortgage payments.
  • The Principal Reduction Alternative is designed to help homeowners whose homes values have dropped significantly to the point where what they owe is much more than the current value of their homes.
  • The Second Lien Modification Program is for help with people who have a second mortgage on their home even if their first mortgage was already modified under HAMP.
  • There is also the Home Affordable Refinance Program which allows the homeowner to refinance into a more affordable and stable mortgage. If you are current on your mortgage but were unable to obtain a traditional refinance because the value of your home has decline, then you might be eligible for HARP.

Programs for the Unemployed

In today’s housing market many people have lost value on their homes. Refinance options available through the government are designed to help balance the mortgage with the value of the home. The economy has also effected peoples jobs and many are now unemployed. The government also aims to help unemployed homeowners. Some unemployment programs provide temporary reduction or suspension of mortgage payments for a minimum of twelve months while you seek employment.

The FHA now requires that lenders extend the forbearance period of unemployed homeowners to 12 months. These changes to the Forbearance Program were announced in July of 2011 and remove the upfront hurdles making it easier for unemployed homeowners to apply and qualify. Losing your job and income is no longer a death sentence for mortgage payers it once was.

The Redemption Period

Remember that even after your house has been sold at a foreclosure sale there is a redemption period. During this time you can still reclaim your home but you will need to be able to pay the outstanding mortgage balance as well as all of the costs incurred during the foreclosure process. Stopping the foreclosure process is often just a matter of coming up with the money at the last second.

To learn more about government grants to stop foreclosure visit Real-Estate-Yogi.com or call one of their national agents toll free at 1-800-987-1397. They can help set you up with the right program to stop foreclosure.