The U.S. Government has come up with a number of programs to assist homeowners who are at risk of foreclosure and otherwise need help with mortgage payment. Most of these programs are run by the U.S. Department of Housing and Urban Development (HUD) in collaboration with the U.S. Treasury Department. The federal agencies supporting these programs are encouraging distressed homeowners to contact their lenders and loan service providers directly to inquire about foreclosure prevention options that are available. Several organizations also assist the government in contacting lenders and loan service provider on behalf of distressed homeowners. From assessment results, the federal agency will determine which initiative will work for the individual’s situation.
HUD: Federal Aid for Housing Needs
The U.S. Department of Housing and Urban Development(HUD) is commissioned to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers. Aside from this, the agency is committed to meet the need for quality affordable rental homes, utilize housing as a platform for improving quality of life, build inclusive and sustainable communities free from discrimination.
HUD: Making Home Affordable (MHA) Programs
The Obama Administration has come up with MHA to help homeowners avoid foreclosure, stabilize the country’s housing market, and improve the nation’s economy. This will provide the common people help with mortgage payment. With the MHA Program, homeowners can lower their monthly mortgage payments and get into more stable loans. Meanwhile, the program can provide a way out which avoids foreclosure for those distressed homeowners for whom home ownership is no longer affordable or desirable.
- Home Affordable Modification Program (HAMP): A program that help with mortgage payment by lowering monthly charges to 31 percent of the verified monthly gross income making payments more affordable.
- Principal Reduction Alternative (PRA): A program encouraging loan service providers and investors to reduce the amount homeowners are supposed to pay, eventually providing homeowners help with mortgage payment.
- Second Lien Modification Program (2MP): A program designed for homeowners with a second mortgage on the same property.
- Home Affordable Refinance Program (HARP): A program for homeowners who have a difficulty in refinancing because the value of the property has declined.
- Home Affordable Unemployment Program (UP): A program designed for temporary reduction or suspension of mortgage payments for at least twelve months while an unemployed homeowner seeks re-employment.
- Emergency Homeowners’ Loan Program (EHLP), Substantially Similar States: A program that authorizes the Secretary to allow funds to be administered by a state that has an existing program that provides substantially similar assistance to homeowners, as determined by the Secretary.
- Federal Housing Administration (FHA) Forbearance for Unemployed Homeowners: A program that requires loan service providers to extend the forbearance period for FHA borrowers who qualify for the program from four months to 12 months and remove upfront hurdles to make it easier for unemployed borrowers to qualify. Thus, providing unemployed homeowners help with mortgage payment.
- Home Affordable Foreclosure Alternatives (HAFA): A program that allows homeowners for a short sale or deed-in-lieu of foreclosure if current mortgage payment is unaffordable.
- Redemption: An initiative to reclaim a foreclosed home after a period from the foreclosure date by paying the outstanding mortgage balance and all costs incurred during the foreclosure process.
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