Help for Homeowners
The housing crisis which began in 2006 continues to impact our economy. I know that Washington families are struggling to make ends meet, and some are falling behind on their mortgage payments or on the brink of foreclosure. It is critical that we stabilize the housing market, which is why I have consistently fought on the side of the American homeowner, and I have supported foreclosure prevention programs such as the Hope for Homeowners program in the Helping Families Save their Home Act, or the Making Homes Affordable loan modification program.
I know that these programs are not perfect, and at times it can be frustrating to get through the application process. If you are looking to refinance your home, or modify a loan, I want you to know that there is a wealth of free, informative resources that the government provides to assist you in this process. This is why I've compiled descriptions of available options below, eligibility requirements, and links to more information about how to apply. I'm working hard in the other Washington to support the federal foreclosure prevention initiatives that help homeowners like you stay in your homes.
Making Homes Affordable
President Obama announced the Making Home Affordable (MHA) program on February 18, 2009 in an effort to help homeowners who are having difficulty making their mortgage payments and want to avoid foreclosure. While the federal government provides incentives to encourage lenders to modify mortgages, participation in the MHA program is entirely voluntary. There are two separate programs within MHA to assist borrowers, the Home Affordable Refinance Program (HARP) and the Home Affordable Modification Program (HAMP).
HARP:
HARP allows homeowners with mortgages owned or guaranteed by Fannie Mae or Freddie Mac to refinance into loans with more favorable terms. The HARP program is geared towards homeowners who are still current on their mortgage payments, but have lost equity in their home due to failing home prices. To be eligible for HARP:
- Borrowers must have a mortgage on a single-family home that is their primary residence
- Borrowers must be current on their mortgage payments (no delinquencies)
- Borrowers outstanding mortgage cannot exceed 125% of the value of their home
For more information about HARP please visit: http://www.makinghomeaffordable.gov/refinance_eligibility.html
HAMP encourages lenders to provide mortgage modifications for troubled borrowers in order to reduce borrowers' monthly mortgage payments to no more than 31% of their monthly income. To be eligible for HAMP:
- Borrowers must have a mortgage on a single-family home primary residence that was originated prior to January 1, 2009
- Borrowers must have an unpaid principal balance on the mortgage that is no greater than $729,750
- Borrowers must pay more than 31% of their income towards their mortgage
For more information about HAMP please visit: http://www.makinghomeaffordable.gov/modification_eligibility.html
HOPE for Homeowners:
Congress created the HOPE for Homeowners program with the help of Senator Cantwell in July, 2008 and it will remain in place until September 30, 2011. HOPE for Homeowners refinances mortgages for borrowers who are having difficulty making their payments, but can afford a new loan insured by the Federal Housing Authority. If approved, the principal balance of borrowers' mortgages would be reduced to 90% of the value of their property, and the borrower would receive a new fixed-rate mortgage from the Federal Housing Authority that is no more than 31% of their monthly income. To be eligible for HOPE for Homeowners:- The borrower must have a mortgage that originated before January 1, 2008
- The borrower must have a mortgage payment that is more than 31% of their monthly income and be unable to afford their current loan
- The borrower may not own another home
- The borrower cannot intentionally default on their mortgage
- The homeowner must agree to share both the equity created at the beginning of the new HOPE for Homeowners mortgage and any future appreciation in their home value with the Federal Housing Authority
- The borrowers lender must agree to release the outstanding mortgage lien
For more information about Hope for Homeowners please visit: http://www.hud.gov/hopeforhomeowners/pressfactsheet.cfm
Loan Workout Options between Borrowers and Lenders:
When a homeowners falls behind on behind on their mortgage there are various options that lenders can employ as an alternative to foreclosure. These options include repayment plans, principal forbearance, principle forgiveness, interest rate reductions, and extended loan terms. For more information about these options please visit: http://www.hud.gov/offices/hsg/sfh/econ/loanworkoutsolutions.cfm or contact your private lender directly.
Foreclosure Prevention Resources
Navigating through the process of applying for a loan modification or refinancing a home can be difficult. The Federal government, non-profit organizations and state agencies have organized free counselors with a wealth of information regarding eligibility requirements. These counselors are available to assist borrowers through the loan modification process and can work with lenders to ensure homeowners are treated fairly.
Foreclosure Prevention
Federal Deposit Insurance Corporation Foreclosure Prevention Website
www.fdic.gov/foreclosureprevention
(877) 275-3342
Foreclosure Mitigation Assistance and Counseling
Washington State Department of Financial Institutions
www.dfi.wa.gov/
(877) 746-4334
U.S. Department of Housing and Urban Development
www.hud.gov
(800) 569-4287
Hope Now
www.hopenow.com
(888) 995-HOPE (4673)
Homeownership Preservation Foundation
www.995hope.org
(888) 995-HOPE (4673)
Washington Homeownership Information
www.homeownership.wa.gov
(877) 894-4663
Washington Homeownership Center
www.homeownership-wa.org/
(877)894-4663 or (206)542-1243 Homeownership Hotline
Neighbor Works America
www.findaforeclosurecounselor.org
General Consumer Help
Federal Reserve Consumer Help
If you have a problem with a bank or other financial institution contact the Federal Reserve for help
http://federalreserveconsumerhelp.gov/
(888) 851-1920
National Consumers League
Then National consumers League has created Mortgage Town to help consumers navigate the process of finding a home, securing a loan, closing on the deal, and maintaining their mortgage. Learn what to do and what pitfalls to avoid along the way to home ownership.
http://www.mortgagetown.org/contact.html
(202) 835-3323
Help With My Bank
Help with my bank provides Answers and assistance to customers on national banks. The site includes answers to common questions and helps walk people through the process of contacting the OCC for additional assistance.
http://helpwithmybank.gov
(800)613-6743
Neighborhood Assistance Corporation of America
Provides general information, requests for services on refinancing, services on predatory or unaffordable mortgages Non-profit advocacy, HUD certified counseling agency
http://naca.com/index_main.jsp
(888)302-6222
The Mortgage Professor's Web Site
Mortgage Glossary
http://www.mtgprofessor.com/glossary.htm
Report Foreclosure Scams and Mortgage Fraud
Federal Trade Commission
www.ftccomplaintassistant.gov/
(877) 382-4357
State Attorney General
www.atg.wa.gov/
(800) 551-4636 (WA -- state only)
State, County and City Consumer Protection Offices
www.consumeraction.gov/state.shtml
Legal Advice
The Washington State Bar Association:
The Bar Association is pleased to offer moderate income homeowners free legal assistance through the Home Foreclosure Legal Aid Project. The project is now accepting referrals of homeowners from federally approved foreclosure prevention agencies around the state. To locate a foreclosure prevention agency in your community please call:
(877) 894-HOME (4663)
Fair Housing Center of Washington:
The Fair Housing Center concentrates on four areas: Complaints Investigation & Advocacy, Education, Information and Referral, Policy & Planning.
http://www.fhcwashington.org/
(253) 274-9523
Northwest Justice Project
(800) 201-1014 (outside King County)
King County Bar Association
(206) 340-2593
Low income individuals may be able to find free legal services
http://www.findlegalhelp.org