The Obama Administration spearheaded a comprehensive Financial Stability Plan to address key problems and help put the economy back on track. A critical piece of that effort is Making Home Affordable, a plan to stabilize the housing market and help up to 7 to 9 million Americans reduce their monthly mortgage payments to more affordable levels.
According to its website, the Making Home Affordable Program offers strong options for homeowners: (1) refinancing mortgage loans through the Home Affordable Refinance Program (HARP), (2) modifying first and second mortgage loans through the Home Affordable Modification Program (HAMP) and the Second Lien Modification Program (2MP) and (3) offering other alternatives to foreclosure through the Home Affordable Foreclosure Alternatives Program (HAFA).
MakingHomeAffordable.gov
The consumer website, makinghomeaffordable.gov, describes itself as providing homeowners with detailed information about these programs along with self-assessment tools and calculators to empower borrowers with the resources they need to determine whether they might be eligible for a modification or a refinance under the Administration's program.
Through this website, borrowers have access to:
- Free counseling resources to help with outstanding questions
- Homeowner events in communities
- Checklist of key documents and materials to have ready when calling loan servicers
- FAQs from borrowers in similar circumstances
Home Affordable Refinance Program (HARP)
The Home Affordable Refinance Program gives up to four to five million homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments.
Through FannieMae.com, homeowners can access a fantastic pdf that explains the Home Affordable Refinance Program (HARP). Here's a brief summary:
The Home Affordable Refinance Program (HARP) is designed to assist homeowners in refinancing their mortgages - even if they owe more than the home's current value.
The primary expectation for Home Affordable Refinance is that refinancing will put responsible borrowers in a better position by reducing their monthly principal and interest payments or moving them from a more risky loan structure (such as interest-only or short-term ARM) to a more stable product (such as a fixed rate mortgage).
The Home Affordable Modification Program (HAMP)
The Home Affordable Modification Program commits $75 billion to keep up to three to four million Americans in their homes by preventing avoidable foreclosures.
A March 4, 2009 press release issued by the U.S. Department of the Treasury, noted that the Home Affordable Modification Program will work in tandem with an expanded and improved Hope for Homeowners program. Working with the banking and credit union regulators, the FHA, the VA, the USDA and the Federal Housing Finance Agency, the Treasury Department's program operates on guidelines that are expected to become standard industry practice in pursuing affordable and sustainable mortgage modifications.
Second Lien Modification Program (2MP)
The Truth About Mortgage.com describes the program as one which will work in tandem with the existing Home Affordable Modification Program to ensure more borrowers receive the assistance they need. “Up to 50 percent of at-risk mortgages have second liens, and many properties in foreclosure have more than one lien,” the Treasury said in a statement.
“Under the Second Lien Program, when a Home Affordable Modification is initiated on a first lien, servicers participating in the Second Lien Program will automatically reduce payments on the associated second lien according to a pre-set protocol.”
Home Affordable Foreclosure Alternatives Program (HAFA)
Real Estate Consumer News, a website touting itself as a one-stop source for consumers to get the information they want and need concerning real estate, notes that the Home Affordable Foreclosure Alternatives Program (HAFA) provides financial incentives to loan servicers as well as borrowers who do a short-sale or a deed-in-lieu to avoid foreclosure on an eligible loan under HAMP.
Both of these foreclosure alternatives allow the lender to avoid potentially lengthy and expensive foreclosure proceedings, while protecting property by minimizing the time it is vacant and subject to vandalism and deterioration. The borrower also avoids the foreclosure process and the uncertainty that comes with it. He can also negotiate when he will give up possession of his home and be released from any further liability from the loan including short-fall and deficiencies.
Supporting a Recovery in the Housing Market
FinancialStability.gov likens the Making Home Affordable Program to other government initiatives. According to the website, "Just as the American Recovery and Reinvestment Act works to save or create several million new jobs and the Financial Stability Plan works to get credit flowing, the Making Home Affordable program will support a recovery in the housing market and ensure that these workers can continue paying off their mortgages."
The present housing crisis is real but temporary. By taking advantage of these and other programs, homeowners can help stem the tide and buy themselves some time. As the economy improves, jobs will reappear, cash flow will begin to move again and many Americans will find themselves breathing a collective sigh of relief.
Amanda Griffith - Amanda Sina Griffith, principal of Bumble PR, has planned and executed media relations and PR campaigns for more than 10 years. ...
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