Making Home Affordable – Mortgage Relief Programs
The Making Home Affordable Program (MHA) ® was launched in 2009 by the Obama Administration. MHA is managed by the U.S. Department of the Treasury, and the U.S. Department of Housing and Urban Development (HUD). The MHA’s mortgage relief programs help homeowners prevent foreclosure. If you are having trouble affording your mortgage payments, the MHA may offer a solution.
UPDATE: As of August 2017, HARP has been extended through December 31, 2018. HAMP expired on December 30, 2016.
The MHA helps homeowners avoid foreclosure through modifying or refinancing mortgages, granting temporary forbearance during unemployment, and transitioning out of homeownership via a short sale or deed-in-lieu of foreclosure. The most common acronyms for mortgage relief programs are HARP, HAMP, and HAFA. Here’s what’s currently available, and how to get more information.
HARP Mortgage Relief Program – Refinance
HARP stands for Home Affordable Refinance Program. If you have been paying your mortgage on time, but you can’t refinance because your home’s value has declined, you may be eligible to refinance through HARP. Your loan officer can check your eligibility for HARP. Your mortgage must have been sold to Freddie Mac or Fannie Mae on or before May 31, 2009, and your current loan-to-value ratio must be greater than 80%. The application deadline for HARP was extended to December 31, 2018.
If your loan is guaranteed by the Federal Housing Administration (FHA), the FHA Short Refinance Program helps borrowers with negative equity. UPDATE: The FHA Short Refinance Program stopped accepting applications as of December 31, 2016.
HAMP Mortgage Relief Program – Lower Your Payments
UPDATE: HAMP expired on December 30, 2016. Freddie Mac and Fannie Mae now offer Flex Modification foreclosure prevention programs. These programs offer significant reductions in monthly mortgage payments – up to 20% reduction. The new modifications will replace the standard and streamlined modifications starting October 1, 2017.
HAMP stands for Home Affordable Modification Program. HAMP provides eligible homeowners the opportunity to reduce their monthly mortgage payments to more affordable levels. HAMP is for homeowners affected by costly increases in expenses, and/or reductions in income. You need to demonstrate financial hardship, and be delinquent or in danger of falling behind on your mortgage. The mortgage must have been obtained before January 1, 2009. Check this list of participating mortgage companies to see if you may qualify for HAMP mortgage relief.
Military Homeowners – If you receive PCS orders or a job transfer that sends you out of the area, you may be eligible for a HAMP modification.
HAFA Mortgage Relief Program – Avoid Foreclosure
HAFA stands for Home Affordable Foreclosure Alternatives. If you can’t afford your mortgage payment, and you need to transition out of homeownership, HAFA provides alternatives to foreclosure. The two options are a short sale, where the mortgage company lets your sell your house for less than you owe on it, or a Deed-in-Lieu (DIL) of foreclosure, where you simply give your title back to the mortgage company. A HAFA short sale is less detrimental to your credit score than a traditional short sale, and HAFA may provide up to $3,000 in relocation assistance when you close escrow. The mortgage must have been obtained before January 1, 2009.
Other MHA Mortgage Relief Programs
The Home Affordable Unemployment Program (UP) helps unemployed homeowners by reducing their mortgage payments, or suspending them altogether for 12 months or more.
You can also check out programs from the California Housing Finance Agency (CalHFA). They offer Keep Your Home California mortgage assistance programs. If you are a senior citizen with an FHA Reverse Mortgage, you may be eligible for Keep Your Home California’s new RevMAP program.
Get Started on a Mortgage Relief Program
The Homeowner’s HOPE™ Hotline answers phone calls 24 hours a day, 7 days a week, 365 days a year. Call them at (888) 995-HOPE (4673) and speak to a HUD-approved housing counselor for free. They offer mortgage relief assistance in over 170 languages. For the hearing impaired, call (877) 304-9709 TTY.
HUD-approved counseling agencies will work with you at no cost, and will even submit documents to your mortgage company for free. Choose from a list of agencies participating in the National Foreclosure Mitigation Counseling (NFMC) program.
Avoid Scams
Unfortunately, there are people who try to take advantage of financially distressed homeowners. Foreclosure rescue and mortgage modification scams often claim to “save” your home for a fee that they charge in advance. Call the hotline first at (888) 995-HOPE (4673) to make sure you are working with a reputable company.
The Bottom Line
Take control of a difficult financial situation right away. Mortgage relief programs can help you save money, protect your credit record, and alleviate stress.
Keep Your Home California is overseen by the California Housing Finance Agency (CalHFA). They offer mortgage relief programs such as the Principal Reduction Program, the Mortgage Reinstatement Assistance Program, the Unemployment Mortgage Assistance Program, and the Transition Assistance Program. Read my article about Keep Your Home California programs.
On June 26, 2014, the Obama Administration extended the application deadline for MHA mortgage relief programs to December 31, 2016. On April 20, 2016, the deadline was further extended to December 31, 2020. Check the Making Home Affordable website for program details and eligibility information. Call the Homeowner’s HOPE™ Hotline at (888) 995-HOPE (4673) and speak to an approved housing counselor to determine the best option for you.
Good luck, and please contact me if you have any questions.
