MORTGAGE ASSISTANCE

The Federal Housing Administration (FHA) recently announced it will allow some unemployed homeowners to remain in their homes without making mortgage payments for an entire year. Homeowners who are in this predicament and qualify under specific terms will be eligible to miss payments without threat of foreclosure starting on August 1.

Grace Period Only for Qualifying Homeowners

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A recent study conducted by the Pew Research Center revealed that 36 percent of homeowners feel it’s okay to walk away from a mortgage loan, depending on the situation. In many cases, the present circumstance may be the result of something beyond the homeowner’s control, including job loss or an underwater mortgage.

If your mortgage loan is behind and you are unemployed, you can apply for a no-interest loan from the government that will help to pay for your mortgage and cover your arrears. The loan, which will pay up to $50,000 to troubled borrowers, falls under what is known as the Emergency Homeowners Loan Program.

What is the Emergency Homeowners Loan Program?

If you are dissatisfied with big banks–perhaps the interest rates are low, loans are expensive or you’re just looking for friendlier and more personalized service –a savings and loan association may be perfect for you. S&Ls aren’t the same as banks and don’t always provide the same services, when one does offer the financial product you need, joining could result in huge benefits.

What is a Savings and Loan Association?

The government has attempted to help out homeowners struggling with underwater mortgages in the past, but so far, there hasn’t been much success with the FHASecure or Hope for Homeowners programs. Though the number of underwater mortgages in the U.S. has decreased since March, it’s been due to an increase in foreclosures, not home values. That’s why a new option has just been set in motion, known as the FHA Short Refinance program.

Homeowners Walking Away from Underwater Mortgages

If you’re suffering from an underwater mortgage but continue to make all of your payments on time, the FHA may be able to bail you out. The administration is offering a refinancing option that could help homeowners whose home values have dropped far below their loan amounts via a new program.

The FHA Short Refinance Option

Major mortgage lender Fannie Mae has decided to eliminate its HomeSaver Advance (HSA) Program, effective September 30. The HSA program was launched in February of 2008 as a way to help qualified borrowers make a delinquent mortgage loan current by allowing them to take on an unsecured personal loan to make their defaulted payments.

The loan amount was capped at $15,000 or 15 percent of the unpaid principle balance. The loan could also be used to pay up to six months’ worth of homeowner association dues.

Unemployment and Mortgage Payments

Suppose you lose a job but still have monthly mortgage payments to make. Unfortunately, few people can keep up with their mortgage payments with only unemployment benefits to rely on. Plus, if your benefits run out before you find your next job, the situation is likely to become desperate.

Losing your house is perhaps the biggest financial risk an average American would ever face. Let us look through the steps you can follow to reduce the chance of foreclosure.

Steps to Find Help With Mortgage Payments if Unemployed

As a result of lending standards getting a tad bit tighter, the Department of Housing and Urban Development announced that it now intends to require borrowers to have scores of at least 500 to qualify for an FHA-insured mortgage loan. This is the first time that the agency will have a minimum score requirement.

While this change could affect a handful of prospective borrowers, HUD says that it shouldn’t make a significant difference since most loans issued in the second quarter of 2010 were issued to those with scores above 620, less than 1 percent went to those with scores below 580 and none were issued to those with scores below 500 (CNN Money).

For those home owners who were unable to make their way into the mortgage modification program offered by the government, getting your mortgage loan adjusted at this point may become more difficult.

According to the Treasury Department, new guidelines were set in place on June 1 that will require loan servicers to verify the income and financial hardships of applicants before placing them into trial modifications. This adjustment will make it tougher for homeowners to receive temporary relief from their unaffordable mortgage payments. (CNN Money)