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YOU MAY QUALIFY FOR HOME AFFORDABLE MODIFICATION

• 1. Is your home your primary residence? Yes
   
• 2. Is the amount you owe on your first mortgage equal to or less than $729,750? Yes
   
• 3. Are you having trouble paying your mortgage? Yes
  For example, have you had a significant increase in your mortgage payment OR reduction in your income since you got your current loan OR have you suffered a hardship that has increased your expenses (like medical bills)?
   
• 4. Did you get your current mortgage before January 1, 2009? Yes
   
• 5. Is your payment on your first mortgage (including principal, interest, taxes, insurance and homeowner's association dues, if applicable) more than 31% of your current gross income? Yes

Under the Home Affordable Modification program, the target maximum amount for your mortgage payment (or mortgage debt-to-income) should be 31% of your gross (pre-tax) monthly income. Do not include any payments on your second mortgage in determining your debt-to-income.

If you answered, YES to ALL; You may be eligible for modification.


MANY LENDERS HAVE MADE A COMMITMENT TO DELAY FORECLOSURE ON ALL LOANS THAT MEET THE MINIMUM ELIGIBILITY CRITERIA FOR A HOME AFFORDABLE MODIFICATION

If you have already missed one or more mortgage payments - contact your mortgage lender immediately or call a HUD-approved housing counselor.

MORTGAGE LOAN MODIFICATION CHECKLIST

Documentation you will be required to provide but not limited to these.

• Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources.
   
• Your most recent income tax return.
   
• Information about your savings and other assets
   
• Information about your first mortgage, such as your monthly mortgage statement.
   
• Information about any second mortgage or home equity line of credit on the house.
   
• Account balances and minimum monthly payments due on all of your credit cards.
   
• Account balances and monthly payments on all your other debts such as student loans and car loans.
   
• A letter describing any circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.) if applicable.

Learn how to do your own mortgage loan refinance.

If your mortgage loan is owned by Fannie Mae or Freddie Mac, you may be eligible for a Home Affordable Refinance to take advantage of lower interest rates. Only loans owned or guaranteed by Fannie Mae or Freddie Mac are eligible. Your mortgage company can tell you who owns your loan, or you can contact Fannie Mae and Freddie Mac directly.

If you are a homeowner who is current on your mortgage payments but unable to refinance to a lower interest rate because your home value has decreased, you may be able to refinance; if.

• 1. Are you the owner of a one- to four-unit home? Yes
   
• 2. Do you have a loan owned or guaranteed by Fannie Mae or Freddie Mac? Yes
   
• 3. Are you current on your mortgage payments? Yes
  “Current” means that you haven’t been more than 30-days late on your mortgage payment in the last 12 months.
   
• 4. Do you believe that the amount you owe on your first mortgage is about the same or less than the current value of your house? Yes

If you answered, YES to ALL; You may be eligible to refinance.

What if I'm not eligible for a Home Affordable Refinance or Modification

The Home Affordable refinance and modification options are designed specifically to allow existing homeowners to keep their homes by making mortgage payments affordable. The plan will not help everyone. For example, it will not help investor borrowers or borrowers who have no income and cannot make any mortgage payment.

If you do not qualify for a Home Affordable Refinance or Modification, your mortgage servicer or HUD-approved housing counselor may have other options that are available to you. These options may include:
 

• Forbearance: The “forbearance” agreement means that you pay only a portion of your regular payment or no payment at all for a specific period of time based on your current financial status. At the end of the forbearance period, you will begin making regular payments as well as an additional amount to pay off the past-due amount.
   
• Repayment Plan: If you have missed some of your monthly payments, your mortgage servicer may be able to help you catch up by creating a schedule for repaying the past-due amounts.
  Special mortgage relief assistance for active duty military service members.
   
• Pre-foreclosure Sale: If you cannot sell your home for an amount that will pay off the mortgage loan, talk to your mortgage servicer about a pre-foreclosure or “short” sale. The mortgage servicer may be willing to accept a payoff amount less than what you owe on the mortgage balance in certain situations.
   
• Deed-in-lieu of foreclosure: If you cannot sell your home in a reasonable amount of time, your mortgage servicer may agree to have you voluntarily transfer the deed to the property to them to help avoid the impact of a foreclosure on your credit rating.

In certain cases, you may need to sell your home and move to more affordable housing. Call your mortgage servicer or a HUD-approved housing counselor to discuss:

Disclaimer

The information and notices contained on this website are intended as general information and are expressly not intended, and should not be regarded, as financial or legal advice.

Readers who have particular questions with real estate mitigation, modification, financing or foreclosure should seek the advice of a real estate attorney.

We highly recommend you consult a lawyer if you want professional assurance to your particular situation.

HUD - Foreclosure Avoidance Counseling
FREE - INFORMATION

HUD-approved housing counseling agencies are available to provide you with the information and assistance you need to avoid foreclosure. As part of President Obama's comprehensive Homeowner Affordability and Stability Plan (HASP), you may be eligible for a special Making Home Affordable loan modification or refinance, to reduce your monthly payments and help you keep your home.

If you need help understanding the Making Home Affordable programs, you can use this search tool to find a counseling agency in your area that will provide you with free foreclosure prevention services. If you are eligible for the loan modification or refinance program, the counselor will work with you to compile an intake package for your servicer.
Talk to a HUD Agency for FREE - here

Foreclosure prevention: Don't get scammed

Where to turn to for help when facing the loss of your home.

By Les Christie, CNNMoney.com staff writer
Last Updated: April 6, 2009: 11:55 AM ET

NEW YORK (CNNMoney.com) -- The problem of mortgage-rescue fraud has ballooned as scammers have reacted to the Obama administration's stepped-up efforts to help borrowers in need. From Web ads to late-night TV spots, companies are soliciting struggling homebuyers and fraudulently promising to help them avoid foreclosure.

On Monday, the Treasury Department, the Department of Housing and Urban Development and several other federal and state agencies announced a crackdown on these scam artists

"Those who would seek to prey on the most vulnerable also seek to intensify their efforts as well," Treasury Secretary Tim Geithner said. "We will aggressively pursue those involved in mortgage rescue scams."

If you are in trouble and need help to fight off foreclosures, you should ask several questions before hiring anyone.

5 questions to ask

1. How much does the service cost? "You should never pay a nickel for foreclosure-prevention counseling," said Austin King, a spokesman for the community organizer Acorn. "The companies that charge for this service are profit driven, not mission driven, and they can charge up to a couple of thousand dollars for doing an hour's work."

Organizations like Acorn, which has offered foreclosure counseling for 20 years, provide expert, HUD-certified caseworkers at no charge to homeowners. They're paid with funds from the government, private foundations and lenders.

2. How long has the organization performed foreclosure-prevention counseling? Longer, of course, is better. Counselors should be fully up to speed on how to handle the particular problems of their clients. Each case may be unique, but experienced counselors can apply what they've learned to other particular cases.

Not every organization has been handling foreclosure problems as long as Acorn, but if they just got into the field a few months ago, they may not yet be fully up to speed.

3. Does the counselor have a direct pipeline your servicer's mortgage-modification department? Many foreclosure counselors have established working relationships with the mortgage-mitigation specialists at the lenders. These are the people authorized to offer workouts to defaulting mortgage borrowers.

If counselors are already talking to a servicer several times a week, they know what the servicer requires and what workouts are likely to be offered. Counselors also may have established personal relationships that they can leverage to negotiate on your behalf.

Of course, almost any firm trying to win your business will say they have a direct contact. So get specific. Ask if they have a written agreement with your servicer; many have put pledges to work with foreclosure counselors down on paper. You can also ask if they work with a specific person at the servicer, someone who would have the authority to make decisions on your account.

4. Do they have an "in" with a decision maker who can override the mortgage mitigation department? Some foreclosure counselors have a servicer's VP for mortgage mitigation on speed dial. If they can't get a desired outcome from the people they usually deal with, they can call the higher-ups and sometimes get them to override decisions.

5. Does the counselor stay with you every step of the way? Often once a client is assigned a caseworker, that person sticks with the borrower throughout the foreclosure prevention process.

That's important. One of the problems that defaulting borrowers have in dealing directly with lenders is they tend to get bounced around from one mortgage mitigation specialist to the next. Filtering everything through a single counselor can save time, which is often in short supply for at-risk borrowers.

It still might not work

Of course, even with all those factors in place, there's no guarantee of success. Interventions can fail simply because there's nothing anyone can do. If you've lost your job and have no income, even counselors with the best credentials and intentions will be hard-pressed to help

"Not everyone should stay in the house," said Marietta Rodriguez, director of National Home Ownership Programs for the community organizer NeighborWorks America.

Counselors, according to her, must ask themselves whether it is in the best financial interest of the borrower to hang on to a home. In some cases, people have to choose "the least amount of collateral damage," she said. That can mean borrowers stop trying to keep homes they simply can't afford under any viable plan and leaving homeownership behind.