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Government Options to Save YOUR Home- Which one is right for you?

Less Than 2% of Loan Modifications Applied For receive Any Type Of Principle Reduction!

Less Than 2% of Loan Modifications Applied For receive Any Type Of Principle Reduction!

Underwater and payment too high? There are several  options available to homeowners who are underwater, and with a mortgage payment that is uncomfortably high– Sacramento Homeowner Options Expert Forth Hoyt Reports on Government Options To Help Homeowners

Some of the most misunderstood Government Programs For Underwater Homeowners:

( A )     FHA’s Short Refinance Program

Launch date: September, 2010

The FHA Short Refinance Program is for borrowers who have remained current on their mortgage payments. It only works IF your bank agrees to write off at least 10% of the principal. If the bank agrees, underwater borrowers can refinance into a new FHA-insured loan.

The refinance will put you back in the black on your 1st mortgage: The debt-to-value ratio has to exceed 97.75%. With any second mortgage factored in, it can’t exceed 115%.

Track record: This got off to a very slow start, with only about 15 refinances done by early 2011. The House Financial Service Committee voted to kill this program in March. It’s future is in doubt.

( B )     Home Affordable Foreclosure Alternatives Program(HAFA)

Launch date: April, 2010

Aimed at borrowers who are underwater on their mortgages and who’ve been denied a modification via HAMP( the government loan modification program ), HAFA is supposed to help homeowners avoid foreclosure. The program pays cash to both the borrower and lender to encourage a short sale, a deal in which the bank accepts the proceeds of the home sale as full repayment of the mortgage debt, forgiving any loss.

Track record: HAFA has become a success and by mid 2012 HUD expects to have over 1 million homeowners in HAFA. Most who were not eligible for the government’s $3,000 assistance was due to the “debt-to-income” ratio, HUD has removed that criteria allowing even more homeowners to qualify.

( C ) Second Lien Modification Program (2MP)

Launch date: April 2009

The Second Lien Modification Program (or 2MP) provides assistance to homeowners who have a second mortgage or a home equity line of credit in addition to their primary mortgage.

Many potential mortgage modifications have run into roadblocks because lenders of home equity loans and lines of credit refuse to cooperate. Second lien holders have to agree to a mortgage modification — and to take a loss — before a loan can be refinanced.

Under 2MP, the government pays cash incentives to the lenders of the second loans so they will allow the refinancing to proceed.

Track record: So far, only 3,516 borrowers have had their second mortgages reduced. That’s a far cry from the estimated one million or more that the program was created to help.

There are more Government Programs Here:

What is HAFA? Can I do HAFA? What is the HAMP/HAFA Program? What’s the Second Lien Modification Program (2MP) Or Home Affordable Refinance Program (HARP)?


There are many government programs to help homeowners, questions on your particular situation?

Contact us today at Forth Hoyt’s Sacramento Short Sale Center

Or find out here about New Government Foreclosure Prevention Program Eligibility- Which Programs Do You Qualify For

I am not an attorney, and you should talk to one!! Call for a referral!

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