MAKING HOME AFFORDABLE/AMERICAN RECOVERY AND REINVESTMENT ACT (ARRA)

Federal Housing Administration (FHA) & U.S. Treasury Department has adopted new program requirements to the "Making Home Affordable Modification" Program, (http://www.makinghomeaffordable.gov) as of August 1, 2011, for unemployed homeowners trying to stay in their homes, while seeking re-employment. The changes to FHA’s "Special Forbearance Program" will require servicers to:

• Postpone payments for unemployed homeowners from four months to 12 months, and remove upfront hurdles to make it easier for unemployed borrowers to qualify.
• Also require servicers participating in the current "Making Home Affordable Program (MHA)" to extend the minimum forbearance period to 12 months wherever possible under regulator and investor guidelines.
• Additionally, forbearance under this program will become available to borrowers who are seriously delinquent.
  

NOTE: The program will not apply to loans backed by:Fannie Mae and Freddie Mac, which are under government control but are aligned with separate independent regulators.

***Individuals are encouraged to contact their mortgage loan servicers for more details, and to see if they qualifiy.*** The program will expire on August 1, 2013.

For a HUD Special Forbearance Fact Sheet on the program changes, see: http://portal.hud.gov/hudportal/documents/huddoc?id=UnemplymtFactSheet.pdf

*****************************************************

The following is summarized from the U.S. Dept. of the Treasury’s, “Making Home Affordable” guidelines, http://www.makinghomeaffordable/gov

The American Recovery and Reinvestment Act (ARRA), “Making Home Affordable” mortgage assistance program will assist current or at-risk homeowners to modify loans to more affordable terms.

1. THE HOME AFFORDABLE REFINANCE PROGRAM (HARP):

Homeowners who may be eligible are those who are current on their mortgages, but are not able to refinance to take advantage of today’s lower interest rates due to a decrease in the value of their home.

Details of the program include:

• You do not have a FHA, VA or USDA loan
• Mortgages that are “Current” means no more than 30 days late on your mortgage payment in the last 12 months.
• You owe more than the home is worth, but your mortgage does not exceed 125% of the current market value of your home..
• You have the ability to make the new payments
• The loans must be held or secured with Fannie Mae or Freddie Mac. For more information:
  • www.fanniemae.com/homeaffordable (800-732-6643)
  • www.freddiemac.com/avoidforeclosure (800-373-3343)
  • To find lender information, see: http://www.hopenow.com (888-995-HOPE

2. THE HOME AFFORDABLE MODIFICATION:

Homeowners who may be eligible are those who are struggling to make their monthly mortgage payments either because their interest rate has increased, or they have less income, or they are experiencing a hardship that has decreased their income. .

Details of the program include:

• Loans must have originated on or before January 1, 2009
• Property must be owner occupied; no investor-owned, vacant or condemned properties.
• If you have already missed one or more mortgage payments, contact your mortgage lender or a HUD-approved housing Counselor, www.hopenow.com (888-995-HOPE)

Information that you will need to provide:

• Information about the monthly gross (before tax) income of your household
• Your most recent tax return
• Information about your assets
• Information about any second mortgage on the house
• Account balances and minimum monthly payments due on credit cards
• Account balances and monthly payments on all other debt such as student and car loans.
• A letter describing the circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.)

BEWARE OF FORECLOSURE RESCUE SCAMS:

• No fee will be associated with acquiring information about Making Home Affordable from a lender or HUD Housing Counselor.
• Beware of persons or organizations that ask for a fee for supplying housing counseling on a homeowner’s delinquent loan.
• Beware of scams that say they can “save” your home if you sign over the deed to your house.
• Never make mortgage payments to anyone other than your mortgage lender.

-----------------------------------------------

SOURCE:
U.S. Treasury Department:Making Home Affordable Program
PREPARED BY: 211/tb
CONTENT LAST REVIEWED: July2011