Avoiding Foreclosure

Several programs are available to assist homeowners who are at risk of foreclosure, and otherwise struggling with their monthly mortgage payments.

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Avoiding Foreclosure

Several programs are available to assist homeowners who are at risk of foreclosure, and otherwise struggling with their monthly mortgage payments. Most programs are administered through the U.S. Treasury Department and HUD. This page provides a summary of these various programs. Please continue reading in order to determine which program can best assist you.

Modify or Refinance Your Loan for Lower Payments

The Making Home Affordable (MHA) Program is a broad strategy to help homeowners avoid foreclosure, stabilize the country’s housing market and improve the nation’s economy. Homeowners can lower their monthly mortgage payments and get into more stable loans at today’s low rates. And for those homeowners for whom homeownership is no longer affordable or desirable, the program can provide a way out which avoids foreclosure. To be responsive to the needs of today’s homeowners, there are also options for unemployed homeowners and homeowners who owe more than their homes are worth. Please read the following program summaries to determine which program options may be best suited for your circumstances.

Home Affordable Modification Program (HAMP):

HAMP lowers your monthly mortgage payment to 31 percent of your verified monthly gross (pre-tax) income to make your payments more affordable. The typical HAMP modification results in a 40 percent drop in a monthly mortgage payment. Eighteen percent of HAMP homeowners reduce their payments by $1,000 or more.

Principal Reduction Alternative (PRA):

PRA was designed to help homeowners whose homes are worth significantly less than they owe by encouraging servicers and investors to reduce the amount you owe on your home.

Second Lien Modification Program (2MP):

If your first mortgage was permanently modified under HAMP SM and you have a second mortgage on the same property, you may be eligible for a modification or principal reduction on your second mortgage under 2MP. Likewise, if you have a home equity loan, HELOC or some other second lien that is making it difficult for you to keep up with your mortgage payments, learn more about this MHA program.

Home Affordable Refinance Program (HARP):

If you are current on your mortgage and have been unable to obtain a traditional refinance because the value of your home has declined, then you may be eligible to refinance through HARP. HARP is designed to help you refinance into a new, affordable and more stable mortgage.

Underwater Mortgages

In today’s housing market, many homeowners have experienced a decrease in their home’s value. Learn about these MHA programs to address this concern for homeowners.

Home Affordable Refinance Program (HARP):

Principal Reduction Alternative (PRA):

PRA was designed to help homeowners whose homes are worth significantly less than they owe by encouraging servicers and investors to reduce the amount you owe on your home.

Treasury/FHA Second Lien Program (FHA2LP):

If you have a second mortgage, and the mortgage servicer of your first mortgage agrees to participate in FHA Short Refinance, you may qualify to have your second mortgage on the same home reduced or eliminated through FHA2LP. If the servicer of your second mortgage agrees to participate, the total amount of your mortgage debt after the refinance cannot exceed 115% of your home’s current value.

Assistance for Unemployed Homeowners

Home Affordable Unemployment Program (UP):

If you are having a tough time making your mortgage payments because you are unemployed, you may be eligible for UP. UP provides a temporary reduction or suspension of mortgage payments for at least twelve months while you seek re-employment.

FHA Special Forbearance:

If you are having difficulty making mortgage payments because you are unemployed and have no other sources of income, you may be eligible for FHA’s Special Forbearance. FHA now requires servicers to extend the forbearance period, by offering a reduced or suspended mortgage payment for up to twelve months, for FHA borrowers who qualify for the program.

Managed Exit for Borrowers

Home Affordable Foreclosure Alternatives (HAFA)

If your mortgage payment is unaffordable, and you are interested in transitioning to more affordable housing, you may be eligible for a short sale or deed-in-lieu of foreclosure through HAFA SM.

Redemption

is a period after your home has already been sold at a foreclosure sale when you can still reclaim your home. You will need to pay the outstanding mortgage balance and all costs incurred during the foreclosure process.

Reach Out for Help

Contact Your Lender

If you are experiencing difficulties making your mortgage payments, you are encouraged to contact your lender or loan servicer directly to inquire about foreclosure prevention options that are available. If you are experiencing difficulty communicating with your mortgage lender or servicer about your need for mortgage relief, there are organizations that can help by contacting lenders and servicers on your behalf.

Contact FHA

FHA staff are available to help answer your questions and assist you to better understand your options as an FHA borrower under these loss mitigation programs. There are several ways you can contact FHA for more information, including:

Assistance for FHA-Insured Homeowners

The Federal Housing Administration (FHA), which is a part of the U.S. Department of Housing and Urban Development (HUD), is working aggressively to halt and reverse the losses represented by foreclosure. Through its National Servicing Center (NSC), FHA offers a number of various loss mitigation programs and informational resources to assist FHA-insured homeowners and home equity conversion mortgage (HECM) borrowers facing financial hardship or unemployment, and whose mortgage is either in default or at risk of default.

Avoiding Foreclosure