Need Mortgage Refinance

First thing you need to know is that the ‘Home Affordable Foreclosure Alternative’ is an additional element to the making home affordable program that offers alternative foreclosure avoidance options. These options come in the form of a Short Sale option and a Deed in Lieu of Foreclosure option.

Home Affordable Foreclosure Alternative via a Short Sale

This is where your property is sold for less than the value of the outstanding amount left on your mortgage. In other words once the property is sold you would normally still have an amount of money left owing which you would still need to pay. But in the HAFA program this amount is written off by the lender so you never have to pay the outstanding amount. This is providing the lender agrees to the sale terms prior to putting the house on the market.

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The program came into being to provide a temporary period where monthly mortgage payments are reduced or suspended when a homeowner becomes unemployed. Your lender will need to be a participating servicer in the ‘HAMP’ program.

The elibility criteria is key to whether you will be accepted onto this program so pay careful attention to the requirements which are listed below for your convenience. If you don’t meet these requirements then there will little point applying to the Unemployment Program or UP as it is more commonly known.

Eligibility:

• The mortgage loan needs to be secured by a 1 to 4 unit property where at least one of the units is your primary residence
• The mortgage is a first lien mortgage which was taken out before the 1st January 2009
• The unpaid primary balance of the loan must be equal to or less than
  * 1 Unit: $729,750
  * 2 Units: $934,200
  * 3 Units: $1,129,250
  * 4 Units: $1,403,400
• The current unpaid balance of the primary loan must be equal to or less than $729,750
• The mortgage must already be delinquent, i.e. you have defaulted on one or more payments or it is reasonably obvious you are about to become delinquent
• The mortgage loan has not already been modified through the ‘HAMP’ program and you have not already received help through the ‘UP’ program
• You have to contact your lender before missing 3 full mortgage payments, once you have missed 3 full payments, you will no longer be eligible
• You actually have to be unemployed to apply to ‘UP’ and be able to provide documented evidence that you will receive unemployment benefit in the month the temporary period of relief becomes effective
• Your lender might decide that have to have been on benefits for up to 3 months before your temporary period of mortgage relief can begin

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There have been some new initiatives creeping into the Home Affordable Modification Program which you should generally be aware of, especially if you are facing foreclosure or have recently faced unemployment or even worse been made unemployed.

So first of all, what does HAMP mean to anyone facing foreclosure when their lender has decided to participate in the Home Affordable Modification Program.

Any mortgage provider who participates in the Home Affordable Modification Program cannot refer a loan for a foreclosure sale, or take action on a foreclosure sale for loans that are eligible for the program until the mortgage holder/homeowner has been evaluated for HAMP, and if the homeowner is eligible a trial modification offer has been made.

So once a mortgage servicer participates in the HAMP program they are obliged to make reasonable efforts to get in touch with any homeowners entering the foreclosure stage i.e. the stage where they would previously have been progressed to foreclosure, to find out if they are eligible for the program. This could include personal contact with a homeowner, but that is at the discretion of the lender and is more likely to be in the form of a letter.

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