Staying on Top of HAMP, HAFA and HARP Homeowner Programs

Staying on top of the string of programs created to help owners caught up in the perfect storm of a high unemployment, rampant underemployment and declining home values, can be confusing to say the least. Here’s a brief overview of the acronyms spawned by the foreclosure crisis:

• HAFA—The Home Affordable Foreclosure Alternatives program was designed to help homeowners to avoid the negative effects of foreclosure by establishing incentives for completing a short sale or a deed-in-lieu of foreclosure. In a short sale, the loan servicer accepts a loan payoff amount from an underwater borrower that is less than the amount actually owed on the first mortgage. With a deed-in-lieu of foreclosure, the borrower transfers ownership of the property to the loan servicer. HAFA provides for $3,000 in relocation assistance after a successful short sale or deed-in-lieu. Which  route you go depends very much on your immediate and longterm situation--before you act, you should consult with a professional for your options.
• HAMP—The Home Affordable Modification Program was designed to help homeowners who are no longer able to make mortgage payments on time due to decreased income or an increase in the monthly payment amount. HAMP reduces a homeowner’s monthly mortgage payment to 31 percent of gross income following a series of steps on the part of the mortgage servicer that can include a rate reduction, a term extension of up to 40 years, deferred principal payments, and (possibly) a lowering of principle. Here is the link to the list of servicers or banks agreeing to participate in this program. On the Loan Lookup tool, you may be able to find out if Fannie or Freddie own your loan.
• HARP—The Home Affordable Refinance Program enables homeowners whose mortgages are backed by Fannie Mae or Freddie Mac and who owe more than their home it’s worth, to refinance and take advantage of today’s historically low interest rates. Originally, HARP was only available to homeowners whose first mortgage did not exceed 125 percent of the current market value of their home.
• HARP 2.0—Starting Dec. 1, 2011, the 125 percent loan-to-value ratio will be eliminated, enabling eligible borrowers to refinance under HARP regardless of how far underwater they are on their mortgage.

Making your way through the maze of programs can take time -- and the situation is often more complicated than it looks at first. Take this survey or contact me for additional help contacting or concerning your servicer, and finding out if your loan is owned by Fannie or Freddie.

And, homeowners looking for information on the national mortgage servicing settlement announcement by the Department of Justice should visit NationalMortgageSettlement.com. Click on the logo below for more information: